Pareto-improving tax policies under hyperbolic discounting

• Main Author: Kang, Minwook
• Other Authors: School of Social Sciences
• Format: Article
• Language: English
• Published: 2021
• Subjects: Social sciences::Economic development; Present Bias; Hyperbolic Discounting
• Online Access: https://hdl.handle.net/10356/151368
• Institution: Nanyang Technological University

This paper investigates the welfare implications of tax policies in the economy with present-biased consumers. We show that consumption taxes, income subsidies, or capital subsidies can improve not only hyperbolically discounted intertemporal utilities, but also exponentially discounted commitment u...