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- Title
Solving multidimensional screening problems using a generalized single crossing property.
- Authors
Dodds, William
- Abstract
This paper derives necessary and sufficient conditions for allocations to be incentive compatible in multidimensional screening problems that satisfy a generalized single crossing property. We then devise a numerical method based on these results to solve multidimensional screening problems. Importantly, our numerical method can be applied to multidimensional screening problems for which existing approaches cannot be applied. We apply this method to several numerical examples in the context of multidimensional optimal taxation. In addition to illustrating how to apply our theoretical results and implement our numerical method, our simulations highlight the importance of bunching in optimal multidimensional taxation. Finally, we prove that bunching must occur in multidimensional optimal taxation problems when the social planner has sufficiently redistributive preferences.
- Subjects
OPTIMAL taxation
- Publication
Economic Theory, 2024, Vol 77, Issue 4, p1025
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-023-01519-8