Charles Blackorby’s research while affiliated with University of British Columbia and other places

Employing a general equilibrium framework, Blackorby and Murty prove that, with a monopoly and under 100% profit taxation and uniform lump‐sum transfers, the utility possibility sets of economies with unit and ad valorem taxes are identical. This welfare equivalence is in contrast to most previous studies, which demonstrate the superiority of the ad valorem tax in a partial equilibrium framework. In this paper, we relax the assumption of 100% profit taxation and allow the consumers to receive profit incomes from ownership of shares in the monopoly firm. We find that, under certain regularity conditions, for any fixed vector of profit shares, the utility possibility sets of economies with unit and ad valorem taxes are not generally identical. But it does not imply that one completely dominates the other. Rather, the two utility possibility frontiers cross each other. Additionally, employing a standard partial equilibrium welfare analysis, we show that the Marshallian social surpluses resulting from the two tax structures are identical when the government can implement unrestricted transfers.

In a simple overlapping-generations model where the government has the power to levy commodity taxes and to implement generation-specific transfers, we show that the second-best optima are not first-best, that is, commodity taxes and subsidies are almost always part of the efficient solution. Provided that savings is positive, we also show that taxes on saving and on capital inputs are required for efficiency at almost all optima. Key wordsoverlapping generations-commodity taxes-tax-reform

This paper explores how to optimally set taxes and transfers when taxation authorities are uninformed about individuals' value of time in both market and nonmarket activities; and can observe both market-income and time allocated to market employment. We show that optimal redistribution in this environment involves a cutoff wage whereby workers above the cutoff are taxed as they increase their income, while workers earning a wage below the cutoff receive an income supplement as they increase their income. Finally, we show that the optimal program transfers zero income to individuals who choose not to work. 1JEL D31, H21, H23, H242

This chapter reviews the welfarist approach to population ethics. This chapter provides an overview of the critical-level utilitarian population principles and their generalized counterparts, examine important properties of these principles and discuss their relationships to other variable population social evaluation rules. The chapter illustrates the difficulties arising in population ethics by means of an impossibility result and present characterizations of the critical-level generalized utilitarian principles and of three of their sub classes.

Harsanyi (1955, 1977) interprets his Social Aggregation Theorem as providing support for weighted utilitarianism – the social ranking of alternatives by a weighted sum of utilities. In the fixed population setting considered by Harsanyi, classical and average utilitarianism coincide and correspond to having identical weights for each individual. The problem Harsanyi considers is one of social choice under uncertainty. Following von Neumann and Morgenstern (1947), he supposes that the set of social alternatives consists of all the lotteries that have a fixed finite set of certain alternatives as possible outcomes once the uncertainty is resolved. Harsanyi requires each individual and society to have preferences that satisfy the expected utility axioms and he represents these preferences by von Neumann–Morgenstern utility functions. His theorem demonstates that the social utility function must be an affine combination of the individual utility functions if society is indifferent between a pair of alternatives whenever all individuals are indifferent (the familiar Pareto Indifference condition). Thus, for any choice of the von Neumann–Morgenstern utility representations, alternatives are ranked socially according to a weighted sum of utilities. The Strong Pareto principle implies that all of the individual weights can be chosen to be positive.Sen (1976) has questioned Harsanyi's utilitarian interpretation of his theorem, noting that the weights used in Harsanyi's theorem to aggregate the individual utilities depend on which von Neumann–Morgenstern utility functions are chosen to represent the preferences, whereas with weighted utilitarianism, the weights should be independent of this choice. Further, the expected utility theorem only says that a preference ordering that satisfies the expected utility axioms can be represented by a von Neumann–Morgenstern utility function.

W.M. (Terence) Gorman was a theorist’s theorist who nonetheless thought himself to be very practical. His contributions were brilliantly original – both in conception and in technical execution – but they often were a difficult read. We sketch below two of his lifelong interests – aggregation over agents and aggregation over commodities – and discuss briefly a few of his other contributions. We hope this brief outline will encourage others to peruse his works in more detail.

An ordering (also called a complete preordering or a weak ordering) is a binary relation which is reflexive, transitive and complete, that is, it is a preordering that is complete.

Lexicographic orderings are orderings in which certain elements of the space being ordered have been selected for special treatment. I begin with an example. Suppose an agent has an ordering over commodities a and b. Although he or she likes both a and b, any bundle which has more of a is preferred to any bundle which has less of a. Of course among bundles which have the same amount of a, bundles with more b are preferred to those with less. Thus, there are no trade-offs between a and b and each indifference set is a single point. The name ‘lexicographic’ comes from the way words are ordered in a dictionary, alphabetically by the first letter and then the second and so on.

We analyze maximization of revenue in the dynamic and stochastic knapsack problem where a given capacity needs to be allocated by a given deadline to sequentially arriving agents. Each agent is described by a two-dimensional type that reflects his capacity requirement and his willingness to pay per unit of capacity. Types are private information. We first characterize implementable policies. Then we solve the revenue maximization problem for the special case where there is private information about per-unit values, but capacity needs are observable. After that we derive two sets of additional conditions on the joint distribution of values and weights under which the revenue maximizing policy for the case with observable weights is implementable, and thus optimal also for the case with two-dimensional private information. In particular, we investigate the role of concave continuation revenues for implementation. We also construct a simple policy for which per-unit prices vary with requested weight but not with time, and prove that it is asymptotically revenue maximizing when available capacity/ time to the deadline both go to infinity. This highlights the importance of nonlinear as opposed to dynamic pricing.