The Optimality of Decision Making During Motor Learning

In our daily lives, we often must predict how well we are going to perform in the future based on an evaluation of our current performance and an assessment of how much we will improve with practice. Such predictions can be used to decide whether to invest our time and energy in learning and, if we opt to invest, what rewards we may gain. This thesis investigated whether people are capable of tracking their own learning (i.e. current and future motor ability) and exploiting that information to make decisions related to task reward. In experiment one, participants performed a target aiming task under a visuomotor rotation such that they initially missed the target but gradually improved. After briefly practicing the task, they were asked to select rewards for hits and misses applied to subsequent performance in the task, where selecting a higher reward for hits came at a cost of receiving a lower reward for misses. We found that participants made decisions that were in the direction of optimal and therefore demonstrated knowledge of future task performance. In experiment two, participants learned a novel target aiming task in which they were rewarded for target hits. Every five trials, they could choose a target size which varied inversely with reward value. Although participants’ decisions deviated from optimal, a model suggested that they took into account both past performance, and predicted future performance, when making their decisions. Together, these experiments suggest that people are capable of tracking their own learning and using that information to make sensible decisions related to reward maximization.

Essays in dynamic optimal taxation: working experience, unemployment scarring and poverty

This thesis investigates the design of optimal tax systems in dynamic environments. The first essay characterizes the optimal tax system where wages depend on stochastic shocks and work experience. In addition to redistributive and efficiency motives, the taxation of inexperienced workers depends on a second-best requirement that encourages work experience, a social insurance motive and incentive effects. Calibrations using U.S. data yield higher expected optimal marginal income tax rates for experienced workers for most of the inexperienced workers. They confirm that the average marginal income tax rate increases (decreases) with age when shocks and work experience are substitutes (complements). Finally, more variability in experienced workers' earnings prospects leads to increasing tax rates since income taxation acts as a social insurance mechanism. In the second essay, the properties of an optimal tax system are investigated in a dynamic private information economy where labor market frictions create unemployment that destroys workers' human capital. A two-skill type model is considered where wages and employment are endogenous. I find that the optimal tax system distorts the first-period wages of all workers below their efficient levels which leads to more employment. The standard no-distortion-at-the-top result no longer holds due to the combination of private information and the destruction of human capital. I show this result analytically under the Maximin social welfare function and confirm it numerically for a general social welfare function. I also investigate the use of a training program and job creation subsidies. The final essay analyzes the optimal linear tax system when there is a population of individuals whose perceptions of savings are linked to their disposable income and their family background through family cultural transmission. Aside from the standard equity/efficiency trade-off, taxes account for the endogeneity of perceptions through two channels. First, taxing labor decreases income, which decreases the perception of savings through time. Second, taxation on savings corrects for the misperceptions of workers and thus savings and labor decisions. Numerical simulations confirm that behavioral issues push labor income taxes upward to finance saving subsidies. Government transfers to individuals are also decreased to finance those same subsidies.