Feasible implementation of taxation methods

Nir Dagan, Roberto Serrano, Oscar Volij

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

This paper studies implementation of taxation methods in one-commodity environments in which the incomes of the agents are unknown to the planner. Feasibility out of equilibrium imposes that the mechanism depend on the environment. We present two mechanisms. The first one, which requires complete information, implements every taxation method in Nash, strong and coalition-proof equilibrium. The second, where informational requirements are relaxed, implements a large class of consistent and monotone methods in subgame perfect equilibrium. Neither mechanism employs the off-equilibrium devices used by the general theory. Under fully private information no method is implementable.

Original languageEnglish
Pages (from-to)57-72
Number of pages16
JournalReview of Economic Design
Volume4
Issue number1
DOIs
StatePublished - 1 Jan 1999
Externally publishedYes

Keywords

  • Consistency
  • Decentralization
  • Feasible implementation
  • Flat tax
  • Taxation methods

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)

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