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Asymmetric Information and Public Economics: The Mirrlees-Vickrey Nobel Prize

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  • Agnar Sandmo

Abstract

This paper surveys the contributions of Nobel laureates James Mirrlees and William Vickrey to the study of asymmetric information in economics, particularly as they relate to problems in public economics. It discusses and interprets Mirrlees's work on optimal income taxation and relates it to previous work on optimal distribution of income, including that of Vickrey. It also describes Vickrey's fundamental contribution to auction theory and its importance for the more general field of preference revelation. It also includes an evaluation of the prize winners' work in other areas of public economics, particularly on optimal indirect taxation and marginal cost pricing.

Suggested Citation

  • Agnar Sandmo, 1999. "Asymmetric Information and Public Economics: The Mirrlees-Vickrey Nobel Prize," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 165-180, Winter.
    • Handle: RePEc:aea:jecper:v:13:y:1999:i:1:p:165-180
    Note: DOI: 10.1257/jep.13.1.165
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.13.1.165
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    References listed on IDEAS

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    1. Jacques H. Dreze, 1995. "Forty Years of Public Economics: A Personal Perspective," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 111-130, Spring.
    2. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    3. Abram Burk, 1938. "A Reformulation of Certain Aspects of Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 52(2), pages 310-334.
    4. Jacques Drèze, 1997. "Research and Development in Public Economics: William Vickrey’s Inventive Quest of Efficiency," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 179-198, June.
    5. Edward Clarke, 1971. "Multipart pricing of public goods," Public Choice, Springer, vol. 11(1), pages 17-33, September.
    6. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    7. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63(4), pages 309-309.
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    Cited by:

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    3. Ruggero Paladini, 2014. "Da Bentham alla tassazione ottimale," Public Finance Research Papers 2, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    4. Sandmo, Agnar, 2013. "The principal problem in political economy: income distribution in the history of economic thought," Discussion Paper Series in Economics 15/2013, Norwegian School of Economics, Department of Economics.
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    7. Katarzyna Sanak-Kosmowska & Jan W. Wiktor, 2020. "Empirical Identification of Latent Classes in the Assessment of Information Asymmetry and Manipulation in Online Advertising," Sustainability, MDPI, vol. 12(20), pages 1-17, October.

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    More about this item

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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