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- handle: 10670/1.enu4rb
- halshs: halshs-03359574
info:eu-repo/semantics/OpenAccess
Mots-clés
Asymmetric information Random contracts Certainty equivalent MESH: C61, D82, D86, H21 C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C61 - Optimization Techniques • Programming Models • Dynamic Analysis D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D86 - Economics of Contract: Theory H - Public Economics/H.H2 - Taxation, Subsidies, and Revenue/H.H2.H21 - Efficiency • Optimal TaxationSujets proches
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Stéphane Gauthier et al., « Certainty Equivalence and Noisy Redistribution », Archive ouverte de Sciences Po (SPIRE), ID : 10670/1.enu4rb
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Résumé
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.