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Common Agency and Coordination: General Theory and Application to Tax Policy

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Author Info

  • Dexit, A.
  • Grossman, G.M.
  • Helpman, E.

Abstract

We develop a model of common agency with complete information and general preferences with non-transferable utility, and prove that the principals'Nash equilibrium in truthful strategies implements an efficient action. We apply this theory to construct a positive model of public finance, where organized special interests acan lobby the government for consumer and producer taxes or subsidies and targeted lump-sum taxes or transfers.

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Bibliographic Info

Paper provided by Tel Aviv in its series Papers with number 11-96.

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Length: 31 pages
Date of creation: 1996
Date of revision:
Handle: RePEc:fth:teavfo:11-96

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Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Phone: 972-3-640-9255
Fax: 972-3-640-5815
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Web page: http://econ.tau.ac.il/research/foerder.asp
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Keywords: INFORMATION; ECONOMIC MODELS;

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Cited by:
  1. Lahiri, Sajal & Raimondos-Møller, Pascalis, 2000. "Special Interest Politics and Aid Fungibility," CEPR Discussion Papers 2482, C.E.P.R. Discussion Papers.
  2. Stephen Coate, 1999. "An Efficiency Approach to the Evaluation of Policy Changes," NBER Working Papers 7316, National Bureau of Economic Research, Inc.
  3. Rafael S. Espinosa Ramirez & Ana Torres Mata, 2004. "Corrupcion, inversion extranjera directa y reformas institucionales," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 1(1), pages 17-39, Julio-Dic.
  4. Marcel Vaillant, 1998. "Endogenous number of lobby groups in a specific factor trade model," Documentos de Trabajo (working papers) 0198, Department of Economics - dECON.
  5. Schleich, Joachim & Orden, David, 1996. "Efficient choice among domestic and trade policies in the Grossman-Helpman Interest-Group Model," Bulletins 7458, University of Minnesota, Economic Development Center.
  6. Cecilia Testa, 2003. "Government Corruption and Legislative Procedures: is One Chamber Better Than Two?," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 41, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.

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