Accession Number:

AD0672950

Title:

OPTIMAL MECHANISMS FOR INCOME TRANSFERS,

Descriptive Note:

Corporate Author:

RAND CORP SANTA MONICA CALIF

Personal Author(s):

• Zeckhauser,Richard

Report Date:

1968-06-01

Pagination or Media Count:

40.0

Abstract:

The poor receive a sub-optimal amount of material goods through the natural economic processes of our society. Poor and non-poor alike seek to institute mechanisms that give something to the poor beyond what they get from the normal workings of the competitive system. The fact that the non-poor share in this desire indicates that an externality is generated when the economic welfare of the poor is improved. On a collective basis, the non-poor are willing to pay for this externality. They sacrifice some of their income in support of redistributive programs that benefit the poor. In this paper we will not be concerned with moral or ethical values. We develop our analysis with the aid of a simple two-party model. One party is the representative poor man, the other the representative citizen. The representative citizen asks himself the central question of this essay. How should assistance programs to the poor be structured so as to maximize the utility function of the representative citizen. Author

Descriptors:

• (*DISTRIBUTION(ECONOMICS)
• OPTIMIZATION)
• GAME THEORY
• EMPLOYMENT
• PROBLEM SOLVING
• ECONOMICS
• POLITICAL SCIENCE
• SOCIOLOGY
• MONEY

Subject Categories:

• Economics and Cost Analysis
• Government and Political Science
• Sociology and Law

Distribution Statement:

APPROVED FOR PUBLIC RELEASE