Sound taxation? On the use of self-declared value
In the 16th century, foreign ships passing through the Sound had to pay ad valorem taxes, known as the Sound Dues. To give skippers an incentive to declare the true value of their cargo, the Danish Crown reserved the right to purchase it at the declared value. We show that it is an equilibrium for the authorities to confiscate the cargo with some fixed probability independent of the declared value. This does not induce truth-telling, but does generate the desired tax revenue. Other applications of this framework include the dissolution of partnerships, and the auditing of income tax returns.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 31 20 525 52 58
Fax: + 31 20 525 52 83
Web page: http://www.fee.uva.nl/cendef/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- repec:oup:restud:v:74:y:2007:i:2:p:447-476 is not listed on IDEAS
- Kim C. Border & Joel Sobel, 1987. "Samurai Accountant: A Theory of Auditing and Plunder," Review of Economic Studies, Oxford University Press, vol. 54(4), pages 525-540.
- Odlyzko Andrew, 2004. "The Evolution of Price Discrimination in Transportation and its Implications for the Internet," Review of Network Economics, De Gruyter, vol. 3(3), pages 1-24, September.
- Mark Bagnoli & Ted Bergstrom, 2005.
"Log-concave probability and its applications,"
Springer, vol. 26(2), pages 445-469, 08.
- Haan, M. A. & Heijnen, P. & Schoonbeek, L. & Toolsema, L. A., 2008.
"Sound taxation? On the use of self-declared value,"
CeNDEF Working Papers
08-02, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Benny Moldovanu, 2002. "How to Dissolve a Partnership," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(1), pages 66-, March.
- Kim-Sau Chung & Jeffrey C. Ely, 2003.
"Foundations of Dominant Strategy Mechanisms,"
1372, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Jeff Ely, 2003. "Foundations of Dominant Strategy Mechanisms," Theory workshop papers 658612000000000064, UCLA Department of Economics.
- Jeffrey C. Ely & Kim-Sau Chung, 2004. "Foundations of Dominant Strategy Mechanisms," Econometric Society 2004 North American Summer Meetings 169, Econometric Society.
- Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, June.
- Niou, Emerson M S & Tan, Guofu, 1994. " An Analysis of Dr. Sun Yat-sen's Self-Assessment Scheme for Land Taxation," Public Choice, Springer, vol. 78(1), pages 103-14, January.
- Yigal Gerchak & J. David Fuller, 1992. "Optimal Value Declaration in "Buy-Sell" Situations," Management Science, INFORMS, vol. 38(1), pages 48-56, January.
When requesting a correction, please mention this item's handle: RePEc:ams:ndfwpp:08-02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cees C.G. Diks)
If references are entirely missing, you can add them using this form.