This paper considers why limited penalties are used to punish tax evaders. The basic model has all individuals drawing an income from the same random distribution. The individuals must decide whether to report thruthfully or understate their incomes. Two types of individuals exist who differ in...

If total social income is fixed and a social planner is uninformed of the utility representations of different individuals, then Lerner showed that the social optimum is to equally distribute income across individuals. We show that the planner by the use of randomization can in some...

Among the rationales for social security, there is the fact that some people have to be forced to save. To explain undersaving, rational prodigality and hyperbolic preferences are often cited but treated separably. In this paper we study those two particular behaviors that lead to forced saving...

This paper explores the shift from defined benefit to defined contribution pension plans when the payout rate from social security is set optimally. This paper shows that when employees are receiving more of their private pensions from defined contribution plans one should be raising the payout...

Among the rationales for social security, there is the fact that some people have to be forced to save. To explain undersaving, rational prodigality and hyperbolic preferences are often cited but treated separably. In this paper we study those two particular behaviors that lead to forced saving...