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A unified approach to the revelation of public goods preferences and to optimal income taxation

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  • Felix Bierbrauer

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

We study a large economy model in which individuals have private information about their productive abilities and their preferences for public goods. A mechanism design approach is used to characterize implementable tax and expenditure policies. A robustness requirement in the sense of Bergemann and Morris (2005) yields individual incentive compatibility constraints that are equivalent to those in the theory of optimal income taxation in the tradition of Mirrlees (1971). Adding a requirement of coalition-proofness yields a set of collective incentive conditions which are akin those in the literature on public goods provision under private information on preferences, in the tradition of Clarke (1971) and Groves (1973).

Suggested Citation

  • Felix Bierbrauer, 2008. "A unified approach to the revelation of public goods preferences and to optimal income taxation," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2008_39, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2008_39
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    References listed on IDEAS

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    Cited by:

    1. Felix Bierbrauer, 2012. "Distortionary taxation and the free-rider problem," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(5), pages 732-752, October.
    2. Traxler, Christian, 2012. "Majority voting and the welfare implications of tax avoidance," Journal of Public Economics, Elsevier, vol. 96(1), pages 1-9.
    3. Felix Bierbrauer, 2009. "Optimal Income Taxation and Public Good Provision with Endogenous Interest Groups," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(2), pages 311-342, April.

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    More about this item

    Keywords

    Optimal Taxation; Public goods provision; Revelation of Preferences; Robust Mechanism Design;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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