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|
|Contact details of provider:|| Postal: Dept. of Economics and Econometrics, Universiteit van Amsterdam, Roetersstraat 11, NL - 1018 WB Amsterdam, The Netherlands|
Phone: + 31 20 525 52 58
Fax: + 31 20 525 52 83
Web page: http://www.fee.uva.nl/cendef/
More information through EDIRC
References listed on IDEAS
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.:
- 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.
- Yigal Gerchak & J. David Fuller, 1992. "Optimal Value Declaration in "Buy-Sell" Situations," Management Science, INFORMS, vol. 38(1), pages 48-56, January.
- 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 103-114, January.
- Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
- Haan, Marco A. & Heijnen, Pim & Schoonbeek, Lambert & Toolsema, Linda A., 2012.
"Sound taxation? On the use of self-declared value,"
European Economic Review,
Elsevier, vol. 56(2), pages 205-215.
- Kim-Sau Chung & J.C. Ely, 2007.
"Foundations of Dominant-Strategy Mechanisms,"
Review of Economic Studies,
Oxford University Press, vol. 74(2), pages 447-476.
- Kim-Sau Chung & Jeffrey C. Ely, 2003. "Foundations of Dominant Strategy Mechanisms," Discussion Papers 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.
- 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.
- Bagnoli, M. & Bergstrom, T., 1989.
"Log-Concave Probability And Its Applications,"
89-23, Michigan - Center for Research on Economic & Social Theory.
- Benny Moldovanu, 2002. "How to Dissolve a Partnership," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(1), pages 1-66, March.
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 you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.