Arbeitspapier

Consuming your Way to Efficiency: Public Goods Provision through Non-Distortionary Tax Lotteries

We revisit the classical result that financing a pure public good through taxation of private consumption is inefficient. To this standard setup we add a consumption contest in which consumers can win a prize. We show that an appropriately chosen contest - which we call a 'tax lottery' - can correct the distortion in private consumption while, at the same time, inducing efficient provision of the public good and balancing the government's budget. The result does not depend on whether the public good is provided exogenously or dependent on actual tax revenue. We show that neither pure fundraising contests nor a sales tax combined with a 'simple' lottery can induce efficiency in the standard environment.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 4228

Klassifikation
Wirtschaft
Game Theory and Bargaining Theory: General
Analysis of Collective Decision-Making: General
Public Economics: General
Thema
public goods
taxation
contests
lotteries

Ereignis
Geistige Schöpfung
(wer)
Giebe, Thomas
Schweinzer, Paul
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2013

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
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Objekttyp

  • Arbeitspapier

Beteiligte

  • Giebe, Thomas
  • Schweinzer, Paul
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2013

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