Equity and effectiveness of optimal taxation in contests under an all-pay auction

Arbeitspapier

The means of contest design may include differential taxation of the prize. This paper establishes that, given a revenue-maximizing contest designer who faces a balanced-budget constraint, the optimal taxation scheme corresponding to an all-pay auction is appealing in two senses. First, it ensures exceptional equitable final prize valuations. Second, it is effective; it yields total contestants' efforts that are larger than those obtained under almost any Tullock-type lottery. Furthermore, when a budget surplus is allowed, the superiority of optimal taxation under the APA is preserved in terms of equity and effectiveness relative to optimal taxation under any contest success function.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 3712

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Analysis of Collective Decision-Making: General ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Conflict; Conflict Resolution; Alliances; Revolutions ; Positive Analysis of Policy Formulation and Implementation
• Thema: contest design ; revenue maximization ; balanced-budget constraint ; budget surplus ; optimal differential taxation ; endogenous stakes ; all-pay auction ; lottery ; Glücksspiel ; Optimale Besteuerung ; Auktionstheorie ; Einnahmen ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Mealem, Yosef ; Nitzan, Shmuel
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2012

Weitere Informationen

• Handle: http://hdl.handle.net/10419/55338
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ