Regulation of natural monopolies, self-selection and optimal taxation
자연독점규제, 자기선택, 그리고 최적조세
- 사회과학대학 경제학부
- Issue Date
- 서울대학교 대학원
- 학위논문 (석사)-- 서울대학교 대학원 : 경제학부, 2013. 2. 이철인.
- 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 service) 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.