Consuming your way to efficiency

Paul Schweinzer, Thomas Giebe

Research output: Working paper

Abstract

We use a simple balanced budget contest to collect taxes on a private good in order to finance a pure public good. We show that—with an appropriately chosen structure of winning probabilities—this contest or can provide the public good efficiently and without distorting private consumption. We provide extensions to multiple public goods and private taxation sources, pure fundraising lotteries, asymmetric preferences, and show the mechanism’s robustness across these settings.
Original languageEnglish
Number of pages19
Publication statusIn preparation - 2011

Publication series

NameSFB/TR 15 working paper series
PublisherSFB/TR 15
Volume352

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