Kevin Roberts

Voting over income tax schedules

Abstract In many voting situations, preferences over options may fail to be single-peaked. This is especially true when options consist of different amounts of a good which is provided through distortionary taxation. In this paper, voting over linear income tax schedules is considered. Although preferences may fail to be single-peaked, a choice set is shown to exist when only mild restrictions are imposed. For many choices in the public domain, the conditions required for this result are likely to be satisfied.

The theory of household behaviour under rationing

This paper simplifies and extends the theory of household behaviour under rationing, using duality and the concept of ‘virtual’ prices. Slutsky-type equations, decomposing the derivatives of the rationed demand functions into income and substitution effects, are derived and these derivatives are related to the corresponding derivatives of the unrationed demand functions for finite as well as infinitesimal ration levels. The results imply that the Keynesian demand multiplier and the Barro-Grossman supply multiplier are more likely to have their expected signs the further the household is from its unconstrained equilibrium.

FUNDING CRITERIA FOR RESEARCH, DEVELOPMENT, AND EXPLORATION PROJECTS

Department of Energy, nor any of their employees, nor any of their contractors, subcontractors, or their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product or process disclosed or represents that its use would not infringe privately owned rights. ABSTRACT The sequential nature of activities like research, development, or exploration requires optimal funding criteria to take account of the fact that subsequent funding decisions will be made throughout the future. Thus, there is a continual possibility of reviewing a projects status, based on the latest information. After setting up a model to capture this feature, optimal funding criteria are investigated. In an important special case, an explicit formula is derived. As well as throwing light upon the nature of development activities, the analysis is also relevant to the general theory of information gathering processes. for energy research and development and more specifically for management decisions in the Photovoltaic Program.

The Theoretical Limits to Redistribution

This is a revised version of the second Review of Economic Studies Lecture presented in April 1983 at the joint meeting of the Association of University Teachers of Economics and the Royal Economic Society held in Oxford. The choice of lecturer is made by a panel whose members are currently Professors Hahn, Mirrlees and Nobay, and the paper was refereed in the usual way. GEM

The limit points of monopolistic competition

Publisher Summary A standard justification for the study of perfect competition is that in large economies, the set of monopolistically competitive equilibria will be approximated by the set of perfectly competitive equilibria. This chapter examines the general validity of this proposition. The distinguishing feature of monopolistic competition is that there exist agents who act in an individually rational way by exploiting the fact that their actions influence the prices. However, monopolistic competition eschews the notions of group rationality that are to be found in equilibrium concepts like the core. The possible validity of the proposition rests upon the idea that in large economies, individually rational behavior is close to price-taking behavior. the chapter presents the replication technique of Debreu and Scarf, and within this framework, it discusses the limit points of monopolistically competitive equilibria. This framework of analysis is similar to that of Gabszewicz and Vial.

The Ethical Voter

No rational egoist should bother voting because, as Skinners Dr. Frazier notices, the probability of any one man casting the decisive ballot “is less than the chance he will be killed on the way to the polls.” No matter how deeply he cares about the electoral outcome, a man must realize that his vote is only one among very many. The larger the electorate, the smaller the probability of any one votes changing the outcome, so in most modern polities the politically rational thing to do is to conserve on shoe leather. Real-world voters, of course, do flock to the polls, which is usually explained in terms of a feeling of “civic duty.” The fact that men get some satisfaction from discharging their civic duty by voting might answer the question of why it is rational for them to go to the polls. Unfortunately, it leaves another—how do they vote once they get there? Presumably, they go ahead and vote according to the dictates of their egoistic interests.

Minimum wage legislation as a second best policy

Mass unemployment is a striking phenomenon of the present economic situation of European market economies. Although the profession of economists has been criticized for not providing satisfactory cures, it has produced a number of different explanations, either complementary or contradictory for the occurrence of mass unemployment. In this paper, we examine the argument that unemployment is the consequence of minimum wage legislation which is socially desirable. The observation of current wage legislations suggests that the above argument is broadly (at least partly) accepted by policy-makers. Curiously enough, a defence of this argument meeting the rigorous requirements of modern theory seems to be missing. Symmetrically, attacks against minimum wage legislation often rely upon reasonings of dubious relevance, i.e., the obvious remark that unemployment is a waste with first best efficiency criteria. The present paper proposes a second best analysis where second best stems from informational asymmetries which prevent the implementation of lump-sum transfers needed for a first-best redistribution policy.’ The question under scrutiny can be reformulated in a more precise way as follows: Does a second best optimal redistribution policy lead to minimum wage legislation and unemployment? Our elements of answer are gathered in 3 sections. In section 2 the principles of the analysis of the desirability of quantity controls and existing results are recalled. In section 3 the analysis of section 2 is specified to a simple prototype model for the study of linear income taxation. In section 4

Condorcet cycles? A model of intertemporal voting

An intertemporal voting model is examined where, at each date, there is a pairwise majority vote between the existing chosen state and some other state, chosen randomly. Intertemporal voting simplifies the strategic issues and the agenda setting is as unrestricted as possible. Voters adopt Markov strategies. The possibility of cycles is examined, both in the intertemporal extension to the Condorcet paradox and in more general examples. The set of possibilities is rich, as is demonstrated by an exhaustive study of a three-person, three-state world. Equilibrium in pure strategies may fail to exist but a weakening of the equilibrium concept to admit probabilistic voting allows a general existence result to be proved. The analysis leads to the development of a dominant state which extends the notion of a Condorcet winner.

Social Choice Theory and the Informational Basis Approach

For over a quarter of a century, the use of utility information based upon interpersonal comparisons has been seen as an escape route from the Arrow Impossibility Theorem. This paper critically examines this informational basis approach to social choice. Even with comparability of differences and levels, feasible social choice rules must be insensitive to a range of distributional issues. Also, the Pareto principle is not solely to blame for the inability to adopt rules combining utility and non-utility information: if the Pareto principle is not invoked then there is no way of combining utility and non-utility information in a ranking of states unless levels of utility are comparable; with level comparability, information can be combined only in restrictive ways and the notion of giving different independent weight to different considerations is ruled out. If informational bases are viewed as the restriction on information that is available, rather than a theoretical limit on information, then there exist methods to estimate richer informational structures and overcome these difficulties.

Social choice rules and real-valued representations☆

Abstract Under commonplace assumptions, it is shown that social choice rules can be given real-valued representations. The usefulness of this characterization is that the general structure of abstract choice rules can be analyzed by investigating the form of their representation and the particular structure of rules can be analyzed by examining the properties of functions that represent them. After the possibilities of representation have been fully analyzed, this is demonstrated with the use of several examples. The analysis suggests a useful technique for studying social choice rules.