The neglect of administrative issues is a serious limitation of optimal tax theory, with implications for its practical applicability. We focus on an important class of administrative problems, namely that the tax bases are measured with some error. We also consider the full set of tax...

The recent experience with low inflation, and the experience of several economies has reopened interest in the liquidity trap; which occurs when the nominal interest rate reaches its zero lower bound. To reduce the real interest rate, and to stimulate the economy, the modern literature...

In standard political economy models, voters are ‘self-interested’ i.e. care only about ‘own’ utility. However, the emerging evidence indicates that voters often have ‘other-regarding preferences’ (ORP), i.e., in deciding among alternative policies voters care about their payoffs...

We show that preference-homogeneity and loss-aversion are necessary and sufficient for the value function to have the power form with identical powers for gains and losses and for the probability weighting functions for gains and losses to be identical.

In standard political economy models, voters are "self-interested" that is, care only about "own" utility. However, the emerging evidence indicates that voters often have "other-regarding preferences" (ORP), that is, in deciding among alternative policies voters care about their payoffs relative...

Given the recent experience, there is a growing interest in the liquidity trap, which occurs when the nominal interest rate reaches its zero lower bound. We outline the surprising policy recommendations when there is the possibility of a zero lower bound. Then, using the Dixit-Lambertini...

Under uncertainty about what others will do, evidence suggests that people often use evidential reasoning (ER), i.e., they assign diagnostic significance to their own actions in forming beliefs about the actions of others. ER successfully explains the evidence from many important games. We...

Many diverse problems in economics can only be reasonably explained by assuming that people have social preferences, i.e., in addition to their own payoffs they are altruistic towards those who are poorer and envious towards those who are richer. How do people with social preferences choose...