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The Government May Want to Encourage Price-Discrimination by Income

Reinstein, David (2015) The Government May Want to Encourage Price-Discrimination by Income. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers.


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Governments have unique private information about individual incomes. This suggests a new policy tool: consumers can be offered an “OpportunityCard” certifying their income, and firms can be allowed to price-discriminate on this basis. This is politically appealing: it should reduce consumption inequality through the use of market mechanisms, rather than through taxes and spending. However, the efficiency consequences are theoretically ambiguous. I propose a pilot field experiment to provide empirical evidence on output, efficiency, and practical issues.

Item Type: Monograph (Working Paper)
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 11 Dec 2015 14:44
Last Modified: 11 Dec 2015 14:44

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