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Dixit Grossman Helpman (1997) - Common Agency And Coordination General Theory And Application To Government Policy Making (view source)
Revision as of 22:50, 4 April 2010
, 22:50, 4 April 2010New page: ==Reference(s)== Dixit, A., G. Grossman and E. Helpman (1997), Common Agency and Coordination: General Theory and Application to Government Policy Making, Journal of Political Economy 105,...
==Reference(s)==
Dixit, A., G. Grossman and E. Helpman (1997), Common Agency and Coordination: General Theory and Application to Government Policy Making, Journal of Political Economy 105, 752-69. [http://www.edegan.com/pdfs/Dixit%20Grossman%20Helpman%20(1997)%20-%20Common%20Agency%20and%20Coordination%20General%20Theory%20and%20Application%20to%20Government%20Policy%20Making.pdf pdf]
==Abstract==
We develop a model of common agency with complete informa- tion and general preferences with nontransferable utility, and we prove that the principals' Nash equilibrium in truthful strategies implements an efficient action. We apply this theory to the construction of a positive model of public finance, where organized special interests can lobby the government for consumer and pro- ducer taxes or subsidies and targeted lump-sum taxes or transfers. The lobbies use only the nondistorting transfers in their noncoop- erative equilibrium, but their intergroup competition for transfers turns into a prisoners' dilemma in which the government captures all the gain that is potentially available to the parties.
Dixit, A., G. Grossman and E. Helpman (1997), Common Agency and Coordination: General Theory and Application to Government Policy Making, Journal of Political Economy 105, 752-69. [http://www.edegan.com/pdfs/Dixit%20Grossman%20Helpman%20(1997)%20-%20Common%20Agency%20and%20Coordination%20General%20Theory%20and%20Application%20to%20Government%20Policy%20Making.pdf pdf]
==Abstract==
We develop a model of common agency with complete informa- tion and general preferences with nontransferable utility, and we prove that the principals' Nash equilibrium in truthful strategies implements an efficient action. We apply this theory to the construction of a positive model of public finance, where organized special interests can lobby the government for consumer and pro- ducer taxes or subsidies and targeted lump-sum taxes or transfers. The lobbies use only the nondistorting transfers in their noncoop- erative equilibrium, but their intergroup competition for transfers turns into a prisoners' dilemma in which the government captures all the gain that is potentially available to the parties.
