Consuming your way to efficiency

Research output: Working paper

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Publication details

DateIn preparation - 2011
Number of pages19
Original languageEnglish

Publication series

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

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.

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