Wiley-Online-Library: Journal of Public Economic Theory: Table of Contents

Optimal Funded Pension for Consumers With Heterogeneous Self‐Control

Kazuki Kumashiro — Tue, 09 Jun 2026 22:17:44 -0700

ABSTRACT

This study designs an optimally funded pension scheme for consumers with self-control problems. The model assumes that consumers' self-control costs are private information and that they can borrow against their future pension benefits. Pension plans are offered to consumers to maximize social welfare, including self-control costs. Results demonstrate that, under certain assumptions, a fully funded pension scheme with benefits equal to the return on contributions is Pareto efficient and satisfies the incentive compatibility constraint. Under this scheme, consumers more likely to feel temptation choose smaller premiums. In implementing this scheme, the government does not even need to know the distribution of types.

Higher Education Subsidies and the Universal Insurance Against a Short Life

Gregory Ponthiere — Sat, 06 Jun 2026 23:56:54 -0700

ABSTRACT

This paper examines the potential role of higher education subsidies as an insurance device against the risk of having a short life, that is, as a device reducing the variance in lifetime well-being due to unequal longevities. We use a two-period dynamic OLG economy with human capital and risky lifetime to study the impact of a subsidy on higher education (financed by taxing labor earnings at older ages) on the distribution of lifetime well-being between long-lived and short-lived individuals. It is shown that, whereas the subsidy on higher education necessarily improves the lot of short-lived individuals in comparison to the laissez-faire, it is only when the subsidy is higher than a critical threshold that this can reduce inequalities in lifetime well-being between long-lived and short-lived individuals. Whether one adopts the utilitarian or the ex post egalitarian social welfare function, the optimal subsidy on higher education lies above the critical threshold, but is larger under the latter social objective.

Life Expectancy and Public Debt in an Aging Economy With Social Security

Mitsuru Ueshina — Sat, 06 Jun 2026 23:50:02 -0700

ABSTRACT

This study clarifies the effects of population aging due to rising life expectancy on the ratio of public debt to GDP and economic growth rate using an endogenous growth model with social security. A previous empirical study demonstrates that population aging increases the ratio of public debt to GDP. Population aging can significantly impact national finances through the pay-as-you-go pension system. Therefore, this study demonstrates that population aging increases the ratio of public debt to GDP by introducing a pay-as-you-go pension system into the overlapping generations model. Additionally, we demonstrate that population aging due to rising life expectancies reduces the rate of economic growth under realistic conditions, which is consistent with the empirical results. Furthermore, although an increase in the replacement rate in the pay-as-you-go pension system monotonically reduces the economic growth rate, there is a replacement rate that maximizes social welfare under certain conditions.

Tax Buyouts in Oligopoly

Giorgos Stamatopoulos — Thu, 28 May 2026 00:00:00 -0700

ABSTRACT

We analyze a novel tax mechanism in imperfectly competitive product markets. The government announces a per unit (or excise) tax rate and auctions-off a number of tax exemptions. Namely, it invites the firms in the market to acquire the right to be exempted from the per unit tax. The highest bidders are exempted by paying their bids; and all other firms remain subject to it. The mechanism has a number of desirable features. First, it allows the government to collect more revenues than the standard tax policies. Further it reduces distortions as fewer firms pay the per unit tax. The mechanism reduces also the excess entry of firms that often occurs in oligopolistic markets. It creates no discrimination as all firms end up having the same net payoff, and it is voluntary as the firms choose whether to participate in the auction or not (and hence choose how to be taxed). Our mechanism can be seen as the product-market analog of the income tax buyout fiscal mechanism (Del Negro et al. 2010).

Interacting Cascades: An Experiment on Between‐Group Information Spillovers

James C. D. Fisher, John Wooders — Thu, 28 May 2026 00:00:00 -0700

ABSTRACT

This paper reports the results of an experiment on information spillovers between groups. We find that a player who is a member of multiple groups aggregates information and serves as a conduit through which information from one group spills over to another. We also find that such players are more influential than similarly situated players who are members of only a single group. We introduce a novel measure of the magnitude of information spillovers, and we identify the behavioral characteristics of the players that determine these magnitudes. While between-group spillovers occur, we find that their magnitudes are smaller than social learning theory predicts.

Market Microstructure and Informational Complexity

Rafael R. Guthmann, Brian C. Albrecht — Thu, 07 May 2026 00:50:54 -0700

ABSTRACT

Competitive markets feature minimal informational complexity; agents only need to know prices to implement an efficient allocation. However, the standard formulation of competitive equilibrium neglects the mechanism of price formation, treating prices as exogenous. Here, we study explicit price formation mechanisms: trade intermediated by market-makers and trade via search and bargaining. We find that as the number of types in the economy grows, the informational complexity of random search diverges to infinity relative to the competitive market. This divergence can be avoided if market makers intermediate trade. Thus, this analysis provides a novel rationale for organized markets if agents' capacity to manage informational complexity is bounded.

Issue Information

Thu, 07 May 2026 00:49:13 -0700

Journal of Public Economic Theory, Volume 28, Issue 3, June 2026.