Publications by PSE researchers

We assess optimal deterministic nonlinear income taxation in a Mirrlees economy with a continuum of risk‐averse agents whose utilities are quasilinear in labor. A weak redistribution motive makes random taxes more likely socially dominated by the deterministic policy where after‐tax income lotteries are replaced with their certainty equivalents.

We consider optimal anonymous consumption taxes in situations where the magnitude of an externality varies with individuals who cause it. For instance, urban fuel consumers generate greater pollution damages compared to rural consumers, but both groups are subjected to the same fuel tax. We provide a condition for the validity of the targeting principle, where external concerns are only addressed through the tax imposed on the commodity responsible for the externality. When this condition holds, one can separate the equity/efficiency and environmental components of this tax. An illustration suggests that Pigovian considerations explain most of the fuel tax in France.

Cet article exploite l’abrogation de l’amendement Wright en 2014 aux États-Unis pour illustrer les conséquences d’un élargissement du marché pertinent sur la capacité des entreprises `a se coordonner sur un équilibre de Nash. A partir de données sur l’industrie du transport aérien, une procédure d’estimation en double-différences met en lumière la baisse de qualité ́e des prévisions des compagnies aériennes sur les marchés de Dallas après que des services longue distance impliquant l’aéroport Love Field ont été autorisés. Ce résultat suggère que les autorités de la concurrence devraient être prudentes lorsqu’elles se réfèrent à l’équilibre de Nash à la suite de réformes d’expansion du marché

Ce texte s ’intéresse aux marches du seigle de la Corrèze en s’appuyant sur les mercuriales du département depuis le traité de libre- échange de 1860 jusqu’à la fin de la Grande Dépression Agricole en1896. De 1860 `a 1882, tous les marchés locaux sont intégrés et restent isolés des échanges commerciaux internationaux. Ils se retrouvent exposés `a partir de 1883 et se fragmentent : Brive et Tulle s’ancrent sur les grandes bourses internationales et se détachent d’Ussel.

This article shows that two widely used data sources from the French military administration pertain to two different enlistment stages and combines these sources to build a quasi-exhaustive panel of young men around their 20s. The panel is applied to measure height growth of men born at the end of the 19th century in an economically backward small rural area of France. The one-year growth is 0:39cm and only concerns the shortest men; the tallest men already reached adult maturity. Industrial pollution imposes a growth penalty that overcomes the enhancing impact of industrial development.

Ce texte s'intéresse aux marchés du seigle de la Corrèze en s'appuyant sur les mercuriales du département depuis le traité de libre-échange de 1860 jusqu'à la fin de la Grande Dépression Agricole en 1896. De 1860 à 1882, tous les marchés locaux sont intégrés et restent isolés des échanges commerciaux internationaux. Ils se retrouvent ex- posés à partir de 1883 et se fragmentent : Brive et Tulle s'ancrent sur les grandes bourses internationales et se détachent d'Ussel.

This paper assesses the usefulness of stochastic contracts in the presence of informational asymmetries. It identifies circumstances where a stochastic redistribution policy is socially dominated by the deterministic policy where after-tax income lotteries are replaced with their certainty equivalent. It also provides a parametric example where every stochastic menu which has the optimal deterministic menu as certainty equivalent is dominated by the deterministic menu, while there exist feasible and incentive compatible lotteries improving locally upon the deterministic menu.

This paper exploits the repeal of the Wright amendment as a natural experiment in order to contribute to the ongoing discussion on how the enlargement of the relevant market affects the ability of firms to coordinate on a Nash equilibrium. Using data on the U.S. air transportation industry, we present a Difference-inDifference procedure which sheds light on the significant loss of accuracy in airlines' predictions in markets originating in Dallas after the Love Field airport started operating long distance services in 2014. This suggests that competition authorities should be careful when they refer to the Nash equilibrium following market expansion reforms.

We study competition in the U.S. airline industry relaxing the Nash equilibrium assumption that airlines are able to predict perfectly the behavior of their competitors. We assess empirically whether an equilibrium is more likely to occur if it is the unique rationalizable outcome. We find that equilibria of short distance routes with high traffic and low concentration are the most fragile, and low-cost companies appear detrimental to their occurrence. Our analysis is applied to the measurement of welfare gains from firms’ entry, and to the characterization of the relevant market when some products are unobserved.

We empirically assess the limits to redistribution due to asymmetric information between a tax authority and tax payers in an optimal taxation model with both direct (income) and indirect (consumption) taxes. Using data from the French consumer expenditure survey “Budget de Famille” released in 2011, we find that the tax system favors middle class households from the 6-th decile in the distribution of consumption expenditures. The innovation of our paper is to identify the incentive constraint where top income earners are ready to relax labor effort to mimic the favored middle classhouseholds as being the only ones that put limits to the redistribution toward themiddle class

We use the Targeted Subsidies Reform implemented in Iran in 2011 to recover empirically the social valuations of Iranian households relying on the assumption of optimal consumption and income taxes, for welfarist and non-welfarist poverty alleviation social criteria. Unlike the existing literature, we do not restrict attention to a specific pattern for the incentive constraints implied by nonlinear income taxation. Instead we recover this pattern by estimating the Lagrange multipliers associated with the incentive constraints. Before the reform we find evidence of redistribution toward the bottom poor income deciles that is limited by an incentive constraint where the rich envy the social treatment of the poor. At the outcome of the reform incentives no longer matter and the social welfare function of the government of Iran displays a Benthamite-like form.

Consider a simple general equilibrium economy with one representative consumer, a single competitive firm and the government. Suppose that the government has to finance public expenditures using linear consumption taxes and/or a lump-sum tax on profits redistributed to the consumer. We show that, if the tax rate on profits cannot exceed 100 percent, one cannot improve upon the second-best optimum of an economy with constant returns to scale by using a less efficient profit-generating decreasing returns to scale technology.