Bunching and second-order conditions: A note on optimal tax theory
Lollivier, Stefan; Rochet, Jean-Charles (1983), Bunching and second-order conditions: A note on optimal tax theory, Journal of Economic Theory, 31, 2, p. 392-400. http://dx.doi.org/10.1016/0022-0531(83)90086-8
TypeArticle accepté pour publication ou publié
Journal nameJournal of Economic Theory
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Abstract (EN)We present in this note a simple non-linear taxation model in which the agents are indexed by a one-dimensional parameter. Our purpose is to propose a method of resolution and to compute the optimal solution. We point out that the solution could not always be obtained with a simple derivation of the first-order conditions of the control problem under consideration, and we show the necessity to take into account the second-order conditions.
Subjects / Keywordsoptimization; simple non-linear taxation model
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