Working Paper
Prizes and patents: using market signals to provide incentives for innovations
Chari, V. V.; Tsyvinski, Aleh; Golosov, Mikhail (2009)
Innovative activities have public good characteristics in the sense that the cost of producing the innovation is high compared to the cost of producing subsequent units. Moreover, knowledge of how to produce subsequent units is widely known once the innovation has occurred and is, therefore, non-rivalrous. The main question of this paper is whether mechanisms can be found which exploit market information to provide appropriate incentives for innovation. The ability of the mechanism designer to exploit such information depends crucially on the ability of the innovator to manipulate market ...
Working Papers , Paper 673

Working Paper
Designing optimal disability insurance
Tsyvinski, Aleh; Golosov, Mikhail (2003)
In this paper we describe how to optimally design a disability insurance system. The key friction in the model is imperfectly observable disability. We solve a dynamic mechanism design problem and provide a theoretical and numerical characterization of the social optimum. We then propose a simple tax system that implements an optimal allocation as a competitive equilibrium. The tax system that we propose includes only taxes and transfers that are similar to those already present in the U.S. tax code: a savings tax and an asset-tested transfer program. Using a numerical simulation, we compare ...
Working Papers , Paper 628

Report
Optimal indirect and capital taxation
Tsyvinski, Aleh; Golosov, Mikhail; Kocherlakota, Narayana R. (2001)
In this paper, we consider an environment in which agents? skills are private information, are potentially multi-dimensional, and follow arbitrary stochastic processes. We allow for arbitrary incentive-compatible and physically feasible tax schemes. We prove that it is typically Pareto optimal to have positive capital taxes. As well, we prove that in any given period, it is Pareto optimal to tax consumption goods at a uniform rate.
Staff Report , Paper 293

Working Paper
Optimal indirect and capital taxation
Tsyvinski, Aleh; Golosov, Mikhail; Kocherlakota, Narayana R. (2001)
In this paper, we consider an environment in which agents? productivities are private information, potentially multi-dimensional, and follow arbitrary stochastic processes. We allow for arbitrary incentive-compatible and physically feasible tax schemes. We prove that it is typically Pareto optimal to have positive capital taxes. As well, we prove that in any given period, it is Pareto optimal to tax consumption goods at a uniform rate.
Working Papers , Paper 615