Regulation of Natural Monopolies, Self-Selection, and Optimal Taxation

• 발행기관: 한국재정학회(구 한국재정·공공경제학회)
• 저자명: Jeehyun Ko Chul-In Lee
• 간행물 정보: 『한국재정학회 학술대회 논문집』2012년도 춘계학술대회 논문집, 15~29쪽, 전체 15쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2012.03.30

영문 초록

It is well-known that the increasing returns-to-scale (IRS) property accounts for the presence of natural monopolies, which usually become public enterprises or are subject to regulations. This paper argues that public enterprises provide private goods not only for the IRS property, but also for relaxing the incentive problem of the tax system: they help relax the self-selection constraint of the optimal income tax problem through nonlinear pricing. The intuition is that when some private goods with IRS properties (e.g., public transportation) relative to other goods are more valuable to low-ability individuals than the high-ability counterparts in terms of the marginal rate of substitution (MRS), the high-ability individuals are discouraged to mimic low-ability ones. Our results provide theoretical underpinning for the low price of publicly provided private goods for low-income individuals, breaking the p = MC rule for efficient redistribution. The optimal nonlinear pricing allows low marginal tax rates for both types, leading to greater work incentives.

목차

Abstract

Ⅰ. Introduction

Ⅱ. The Model

Ⅲ. Optimal Pricing

Ⅳ. Summary and Conclusions

References

키워드

public provision of private goods self-selection and optimal taxation