Essays on Public Economics

Author:

Miyazaki, Koichi

Graduate Program:

Economics

Degree:

Doctor of Philosophy

Document Type:

Dissertation

Date of Defense:

May 27, 2010

Committee Members:

Professor Edward J Green, Dissertation Advisor/Co-Advisor
Srinivas A Tadigadapa, Committee Member
Neil Wallace, Committee Member
Ruilin Zhou, Committee Member
Edward James Green, Committee Chair/Co-Chair

Keywords:

stochastic overlapping generations model
social security
voting
costly information acquisition

Abstract:

Chapter 1 considers a stochastic overlapping generations model in which, at each date, a distributional shock divides the constant total endowment between a young and an old agents. Commitment cannot be externally enforced. More precisely, at each date, the young and old agents simultaneously decide how much of their respective endowments to transfer to the other agent, but they cannot be forced to give away any portion of their endowments. I focus on a stationary trigger strategy, in which the old agent does not make transfers, and characterize the subgame perfect equilibrium (SPE) stationary trigger strategies. I also discuss the efficiency of these SPE allocations. The main finding is that for some parameter values, the SPE stationary trigger strategy allocations are interim Pareto efficient in the set of all feasible allocations, a set that includes allocations that violate the limited commitment constraint. Chapter 2 studies the role of social security in an overlapping generations model with production and capital accumulation, where the production faces an aggregate productivity shock. In a deterministic model such as Diamond (1965), the rate of return on capital and population growth rate are keys to understand the role of social security. The question of this paper is whether the similar criterion is applicable to a stochastic version of the model. When the variance of the aggregate shock is small, the same criterion is exactly applicable. However, when the variance is not small enough, the phenomenon that does not occur in a deterministic case may happen in a stochastic case, because of the precautionary saving motive that does not exist in a deterministic version of the model. Chapter 3 extends a model discussed in Dekel and Piccione (2000) by adding a costly information acquisition stage. In Dekel and Piccione (2000), a symmetric sincere voting equilibrium in a simultaneous voting game is also an equilibrium in a sequential voting game. This paper shows that their result is not robust in some class of cost functions.