[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/nid/ndagan/009.html
   My bibliography  Save this paper

Feasible Implementation of Taxation Methods

Author

Abstract
This paper studies the problem of implementation of taxation methods in one-commodity environments in which the taxable incomes of the (at least two) agents are fixed and not known to the planner. In this problem (unlike most work in implementation theory), the feasible set is unknown to the designer. We first show that feasibility out of equilibrium imposes that the mechanism depend on the environment. Next we present two game forms. In the first one, which requires complete information among the tax payers, each agent reports the incomes of all players to a central agency, and implementation of every taxation method is obtained in Nash, strong and coalition-proof equilibrium. In the second, informational requirements may be somewhat relaxed. One of the agents makes a tax proposal, the others bargain with him, and the services of a central agency are used only to solve disputes between pairs of agents. This game form implements a large class of consistent and monotone taxation methods in subgame perfect equilibrium. Neither mechanism employs the off-equilibrium devices used by the general theory. Partial departures from complete information still allow for implementability. However, under fully private information implementation is not possible.

Suggested Citation

  • Nir Dagan & Roberto Serrano & Oscar Volij, 1999. "Feasible Implementation of Taxation Methods," Economic theory and game theory 009, Nir Dagan.
    • Handle: RePEc:nid:ndagan:009
    as

    Download full text from publisher

    File URL: https://www.nirdagan.com/research/199901/full.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dagan, Nir & Serrano, Roberto & Volij, Oscar, 1997. "A Noncooperative View of Consistent Bankruptcy Rules," Games and Economic Behavior, Elsevier, vol. 18(1), pages 55-72, January.
    2. Tian, Guoqiang, 1993. "Implementing Lindahl allocations by a withholding mechanism," Journal of Mathematical Economics, Elsevier, vol. 22(2), pages 169-179.
    3. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 23-38.
    4. Thomson, A., 1989. "The Consistency Principle," RCER Working Papers 192, University of Rochester - Center for Economic Research (RCER).
    5. Roberto Serrano & Rajiv Vohra, 1997. "Non-cooperative implementation of the core," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(4), pages 513-525.
    6. Matthew O. Jackson, 1992. "Implementation in Undominated Strategies: A Look at Bounded Mechanisms," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 757-775.
    7. Piketty Thomas, 1993. "Implementation of First-Best Allocations via Generalized Tax Schedules," Journal of Economic Theory, Elsevier, vol. 61(1), pages 23-41, October.
    8. Arnold Jacob Cohen Stuart, 1958. "On Progressive Taxation," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 48-71, Palgrave Macmillan.
    9. 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.
    10. Young, H. P., 1988. "Distributive justice in taxation," Journal of Economic Theory, Elsevier, vol. 44(2), pages 321-335, April.
    11. Young, H. P., 1987. "Progressive taxation and the equal sacrifice principle," Journal of Public Economics, Elsevier, vol. 32(2), pages 203-214, March.
    12. Tian Guoqiang, 1994. "Implementation of Linear Cost Share Equilibrium Allocations," Journal of Economic Theory, Elsevier, vol. 64(2), pages 568-584, December.
    13. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    14. E. Maskin, 1983. "The Theory of Implementation in Nash Equilibrium: A Survey," Working papers 333, Massachusetts Institute of Technology (MIT), Department of Economics.
    15. O'Neill, Barry, 1982. "A problem of rights arbitration from the Talmud," Mathematical Social Sciences, Elsevier, vol. 2(4), pages 345-371, June.
    16. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
    17. Guoqiang Tian, 1989. "Implementation of the Lindahl Correspondence by a Single-Valued, Feasible, and Continuous Mechanism," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 613-621.
    18. Francis Ysidro Edgeworth, 1958. "The Pure Theory of Taxation," International Economic Association Series, in: Richard A. Musgrave & Alan T. Peacock (ed.), Classics in the Theory of Public Finance, pages 119-136, Palgrave Macmillan.
    19. Andrew Postlewaite & David Wettstein, 1989. "Feasible and Continuous Implementation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 603-611.
    20. Nir Dagan, 1994. "On the Least Sacrifice Principle in Taxation," Economic theory and game theory 008, Nir Dagan, revised Feb 2008.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Biung†Ghi Ju & Juan D. Moreno†Ternero, 2017. "Fair Allocation Of Disputed Properties," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(4), pages 1279-1301, November.
    2. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
    3. Triossi, Matteo, 2005. "Implementation with state dependent feasible sets and preferences: a renegotiation approach," UC3M Working papers. Economics we057136, Universidad Carlos III de Madrid. Departamento de Economía.
    4. Ignacio García-Jurado & Julio González-Díaz & Antonio Villar, 2006. "A Non-cooperative Approach to Bankruptcy Problems," Spanish Economic Review, Springer;Spanish Economic Association, vol. 8(3), pages 189-197, September.
    5. Li, Jiawen & Ju, Yuan, 2023. "Divide and choose: An informationally robust strategic approach to bankruptcy problems," Journal of Mathematical Economics, Elsevier, vol. 107(C).
    6. Luis Corchón & Matteo Triossi, 2011. "Implementation with renegotiation when preferences and feasible sets are state dependent," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(2), pages 179-198, February.
    7. Nasrollahi Shahri, Nima, 2010. "The Effectiveness of international investment instruments on the amount of foreign investment (a case study of Iran)," MPRA Paper 36317, University Library of Munich, Germany.
    8. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.
    9. Byungchae Rhee, 2008. "A characterization of optimal feasible tax mechanism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(4), pages 619-653, May.
    10. repec:cte:werepe:we081207 is not listed on IDEAS
    11. Byungchae Rhee, 2004. "A Characterization of Optimal Feasible Tax Mechanism," Econometric Society 2004 Far Eastern Meetings 551, Econometric Society.
    12. Roberto Serrano, 2003. "The Theory of Implementation of Social Choice Rules," Working Papers 2003-19, Brown University, Department of Economics.
    13. David Pérez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
    14. M. Albizuri & J. Echarri & J. Zarzuelo, 2015. "A non-cooperative mechanism for the Shapley value of airport problems," Annals of Operations Research, Springer, vol. 235(1), pages 1-11, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.
    2. Roberto Serrano, 2003. "The Theory of Implementation of Social Choice Rules," Working Papers 2003-19, Brown University, Department of Economics.
    3. Peter J. Lambert & Helen T. Naughton, 2009. "The Equal Absolute Sacrifice Principle Revisited," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 328-349, April.
    4. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
    5. Long, Yan & Sethuraman, Jay & Xue, Jingyi, 2021. "Equal-quantile rules in resource allocation with uncertain needs," Journal of Economic Theory, Elsevier, vol. 197(C).
    6. Lahiri, Somdeb, 2001. "Axiomatic characterizations of the CEA solution for rationing problems," European Journal of Operational Research, Elsevier, vol. 131(1), pages 162-170, May.
    7. Maskin, Eric & Sjostrom, Tomas, 2002. "Implementation theory," Handbook of Social Choice and Welfare,in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 5, pages 237-288 Elsevier.
    8. Peter J. Lambert & Helen T. Naughton, 2006. "The Equal Sacrifice Principle Revisited," University of Oregon Economics Department Working Papers 2006-4, University of Oregon Economics Department, revised 01 Jun 2006.
    9. Tian, Guoqiang, 1997. "Virtual implementation in incomplete information environments with infinite alternatives and types," Journal of Mathematical Economics, Elsevier, vol. 28(3), pages 313-339, October.
    10. Carmen Herrero & Juan Moreno-Ternero & Giovanni Ponti, 2010. "On the adjudication of conflicting claims: an experimental study," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 34(1), pages 145-179, January.
    11. Carmen Herrero, 2000. "The Three Musketeers. Old Solutions to Bankruptcy Problems," Econometric Society World Congress 2000 Contributed Papers 0609, Econometric Society.
    12. Thomson, William, 2005. "Divide-and-permute," Games and Economic Behavior, Elsevier, vol. 52(1), pages 186-200, July.
    13. Christopher P. Chambers & Juan D. Moreno-Ternero, 2017. "Taxation and poverty," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(1), pages 153-175, January.
    14. Tymon Słoczyński, 2012. "Zastosowanie zasady równych ofiar do oceny sprawiedliwości taryfy podatku dochodowego od osób fizycznych (PIT) w Polsce," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 23-47.
    15. Herrero, Carmen & Villar, Antonio, 2001. "The three musketeers: four classical solutions to bankruptcy problems," Mathematical Social Sciences, Elsevier, vol. 42(3), pages 307-328, November.
    16. Guoqiang Tian, 1999. "Bayesian implementation in exchange economies with state dependent preferences and feasible sets," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(1), pages 99-119.
    17. Simon Gächter & Arno Riedl, 2006. "Dividing Justly in Bargaining Problems with Claims," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 27(3), pages 571-594, December.
    18. Tsay, Min-Hung & Yeh, Chun-Hsien, 2019. "Relations among the central rules in bankruptcy problems: A strategic perspective," Games and Economic Behavior, Elsevier, vol. 113(C), pages 515-532.
    19. Tian, Guoqiang, 2009. "Implementation of Pareto efficient allocations," Journal of Mathematical Economics, Elsevier, vol. 45(1-2), pages 113-123, January.
    20. Juarez, Ruben & Ko, Chiu Yu & Xue, Jingyi, 2018. "Sharing sequential values in a network," Journal of Economic Theory, Elsevier, vol. 177(C), pages 734-779.

    More about this item

    Keywords

    Feasible Implementation; Taxation Methods; Consistency; Decentralization; Information; Flat Tax;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nid:ndagan:009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nir Dagan (email available below). General contact details of provider: https://www.nirdagan.com/research/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.