Market design responses to inequality

Grant description:

Much of the theory of market design operates in two extreme environments: One where monetary transfers are prohibited, and one where there are transfers but each individual values one dollar in the same way. This research seeks to understand how to optimally design goods markets in the presence of wealth inequality and is conducted across three discrete research papers. The first project develops an analytic framework for a middle ground where agents are wealth constrained or have income effects. The second project develops a continuous-time model of dynamic capital taxation, and the third project considers dynamic effects of inequality using formal models.