Intra-Generational Externalities and Inter-Generational Transfers

Martin Kolmar () and Volker Meier

No 1437, CESifo Working Paper Series from CESifo

Abstract: In an environment with asymmetric information the implementation of a first-best efficient Clarke-Groves-Vickrey (D’Aspremont-Gérard-Varet) mechanism may not be feasible if it has to be self-financing. By using intergenerational transfers, the arising budget deficit can generally be covered in every generation if the growth rate of the economy is positive. This result yields an alternative explanation for the existence of pay-as-you-go financed transfer mechanisms.

Keywords: pay-as-you-go; externalities; mechanism design; adverse selection (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-mic and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Intragenerational externalities and intergenerational transfers (2012)
Working Paper: Intragenerational externalities and intergenerational transfers (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1437

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