|
EconStor >
Yale University >
Economic Growth Center (EGC), Yale University >
Center Discussion Papers, Economic Growth Center (EGC), Yale University >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/26967
|
| | |
| Title: | | Coordinating development: can income-based incentive schemes eliminate pareto inferior equilibria?  |
| Authors: | | Bond, Philip Pande, Rohini |
| Issue Date: | | 2005 |
| Series/Report no.: | | Center discussion paper // Economic Growth Center 924 |
| Abstract: | | Individuals' inability to coordinate investment may significantly constrain economic development. In this paper we study a simple investment game characterized by multiple equilibria and ask whether an income-based incentive scheme can uniquely implement the high investment outcome. A general property of this game is the presence of a crossover investment point at which an individual's incomes from investment and non-investment are equal. We show that arbitrarily small errors in the government’s knowledge of this crossover point can prevent unique implementation of the high investment outcome. We conclude that informational requirements are likely to severely limit a government's ability to use income-based incentive schemes as a coordination device. |
| Subjects: | | Coordination public policy income taxation implementation |
| JEL: | | O21 H23 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Center Discussion Papers, Economic Growth Center (EGC), Yale University
|
| Files in This Item:
| |
|
| No. of Downloads:
| |
| last Month |
last 3 Month |
total |
|
|
|
|
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/26967
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|