The conflict between notions of fairness and the Pareto principle

Most legal academics and policy makers believe that notionsof fairness should be accorded positive weight in evaluatinglegal policies. We explain, however, that ascribing importanceto any notion of fairness (other than one concerned solely withthe distribution of income) will sometimes lead to a conflictwith the Pareto principle. That is, to endorse a notion of fairnessis to endorse the view that it can be desirable to adopt a legalrule that will reduce the well-being of every person in society.     

Who will vote quadratically? Voter turnout and votes cast under quadratic voting

Who will vote quadratically in large-N elections under quadratic voting (QV)? First, who will vote? Although the core QV literature assumes that everyone votes, turnout is endogenous. Drawing on other work, we consider the representativeness of endogenously determined turnout under QV. Second, who will vote quadratically? Conditional on turning out, we examine reasons that, in large-N elections, the number of votes that an individual casts may deviate substantially from that under pure, rational QV equilibrium play. Because turnout itself is driven by other factors, the same determinants may influence how voters who do turn out choose the quantity of votes to cast. Independently, the number of votes actually cast may deviate dramatically from pure QV predictions because of the complex and refined nature of equilibrium play. Most plausibly, voting behavior and outcomes would be determined predominately by social and psychological forces, would exhibit few of the features emphasized in the analysis of hyper-rational equilibrium play, and would have consequential properties that require a different research agenda to bring into focus. Some of our analysis also has implications for voting behavior under other procedures, including one person, one vote.     

On the Superiority of Corrective Taxes to Quantity Regulation

The traditional view of economists has been that correctivetaxes are superior to direct regulation of harmful externalitieswhen the state's information about control costs is incomplete.In recent years, however, many economists seem to have adopteda different view—that either corrective taxes or quantityregulation could be superior to the other. We emphasize thatone argument for this newer view, identified with Weitzman (1974),holds only if the state is constrained to use a fixed tax rate(a linear tax schedule) even when harm is nonlinear. But if—asseems more plausible—the state can impose a nonlineartax equal to the schedule of harm or can adjust the tax rateupon learning that it diverges from marginal harm, then correctivetaxes are superior to quantity regulation. Another argumentfavoring quantity regulation is that it gains appeal when thestate is uncertain about the harm caused by an externality.In this case, however, a corrective tax schedule (equal to theexpected harm schedule) is superior to quantity regulation.