Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/62213 
Year of Publication: 
2000
Series/Report no.: 
SFB 373 Discussion Paper No. 2000,8
Publisher: 
Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes, Berlin
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: 
Document Type: 
Working Paper

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