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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18830
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| Title: | | Pawns and Queens Revisited : public provision of private goods when individuals make mistakes  |
| Authors: | | Pirttilä, Jukka Tenhunen, Sanna |
| Issue Date: | | 2005 |
| Series/Report no.: | | CESifo working papers 1466 |
| Abstract: | | This paper analyses the optimal tax policy and public provision of private goods when individuals differ in two respects: income-earning ability and rationality. Publicly provided goods should be overprovided or subsidised, relative to the decentralised optimum, if society?s marginal valuation of them exceeds the individual valuation and if these goods help relax the self-selection constraints, formulated in a new way. Optimal marginal income tax rates are shown to differ from the standard rules if publicly provided goods and labour supply are related. |
| Subjects: | | behavioral economics optimal taxation public provision |
| JEL: | | H42 H21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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