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Title:Tax liability side equivalence in experimental posted-offer markets PDF Logo
Authors:Borck, Rainald
Engelmann, Dirk
Müller, Wieland
Normann, Hans-Theo
Issue Date:2000
Series/Report no.:Discussion Papers, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes 2000,8
Abstract:In theory, the incidence of a tax should be independent of which side of the market it is levied on. This principle of liability side equivalence underlies virtually all theories of tax incidence. Policy discussions, however, tend to place great emphasis on the legal division of tax payments. We use computerized experimental posted-offer markets to test liability side equivalence. We find that market outcomes are essentially the same when the tax is levied on sellers as when it is levied on buyers. Prices in both treatments are slightly above the competitive equilibrium. Thus we cannot reject liability side equivalence.
Subjects:Tax Liability
Posted Offer Market
Experimental Economics
JEL:H22
C99
Persistent Identifier of the first edition:urn:nbn:de:kobv:11-10047125
Document Type:Working Paper
Appears in Collections:Discussion Papers, SFB 373, HU Berlin

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