Essays in microeconomic theory
- This dissertation consists of two chapters in two different areas of microeconomic theory: the informativeness of prices and optimal taxation. In both of these chapters, I develop a model that lends itself to game-theoretic analysis. Chapter 1 is a theoretical study on the informativeness of prices in financial markets. I study a class of mechanisms that represent a financial market for a security. These mechanisms quote a price, which solely depends on the total number of shares outstanding. Traders can sequentially buy or sell shares of the security, and get to trade many times. Among the class of such mechanisms, I determine which ones lead to immediate revelation of information by the traders, in the sense that traders immediately bring the price to their posterior belief about the value of the security in the first period where they are given an opportunity to trade. I find that while it is possible to find mechanisms that achieve this property for all information structures with conditionally independent signals, it is impossible to find a mechanism that achieves it for every information structure. Chapter 2 develops a model of optimal redistributive taxation for social insurance purposes when agents are able to share risks with a group of relatives and friends, achieving a Pareto optimal allocation within the group. It describes how the sizes of these groups (syndicates) affect the optimal tax rate. When syndicates are exogenously given, the optimal linear tax decreases as the sizes of syndicates increase. A model of joint syndicate formation and optimal policy choice is then proposed. Syndicates are formed by agents for risk-sharing purposes, at a cost which decreases with geographical, social and blood proximity between agents. In setting the income tax rate, the government takes into account the impact of its policy on the efforts made by agents to form syndicates. This may considerably alter the government's problem, to the extent that it may become locally convex and, as proximity decreases (e.g. because related agents are more geographically mobile), the government's optimal policy may jump from a zero tax rate to a substantial positive rate. This could partially explain why social insurance schemes emerged late in the development of countries such as the United Kingdom, France, and the United States.
|Type of resource
|electronic; electronic resource; remote
|1 online resource.
|Lallour, Antoine Yves Marie, Mr
|Stanford University, Graduate School of Business.
|Statement of responsibility
|Submitted to the Graduate School of Business.
|Thesis (Ph.D.)--Stanford University, 2012.
- © 2012 by Antoine Yves Marie Lallour
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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