Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30683
Authors: 
Bierbrauer, Felix
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper 2701
Abstract: 
We study a large economy model in which individuals have private information about their productive abilities and their preferences. Moreover, there is aggregate uncertainty so that the social benefits from taxation and public goods provision are a priori unknown. The analysis is based on a mechanism design approach that imposes a requirement of robustness with respect to individual beliefs and a requirement of coalition-proofness. The paper provides a tractable and intuitive characterization of incentive-feasible tax and expenditure policies: Incentive constraints associated with productive abilities reflect only individual behavior, whereas those associated with public goods preferences reflect only collective behavior.
Subjects: 
optimal taxation
public goods provision
revelation of preferences
robust mechanism design
JEL: 
D71
D82
H21
H41
Document Type: 
Working Paper

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