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...

Salop and Stiglitz analyzed an equilibrium search model under a Stackelberg assumption that consumers could react to changes in the distribution of prices charged by firms even though they did not know which particular firms were charging the lowest price. In this chapter we assume that firms...

We find equilibrium price distributions in a search model with asymmetric duopolists whose marginal costs differ. There are informed consumers who know both prices and buy at the lower one and uninformed consumers who, not knowing prices, choose a store arbitrarily. With asymmetries, pure...

Governments often divide operations into separate branches that face different constraints and have limited information. Such separation is feasible if each can operate by solving a simple optimization problem using limited information without requiring game-theoretic calculations about others'...

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...