Unformatted text preview: the truth about his ability in the second period. Also, they guarantee that the individual tells the truth “if” he saves the correct amount. Question: What if the individual saves more than K * 2 and plan to lie about their ability if they happen to be the able type? We ﬁrst show that this double deviation is feasible and improves individuals welfare. Consider three diﬀerent plan by the agent 62...
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 Fall '10
 wong
 Calculus, Public Finance, eﬃcient allocations

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