Optimal Taxation and Asymmetric Information in an Economy with Second-Hand Trade
This paper concerns optimal income and commodity taxation in a two-type overlapping generations model, where used durable goods are traded in a second-hand market. As second-hand transactions are difficult to observe, we assume that the government is unable to directly control second-hand transactions via commodity taxation. A basic question is how the government in this case may use the second-hand market as a channel for relaxation of the self-selection constraint. We show how the appearance of a second-hand market for used durable goods affects the optimal use of labor income and capital income taxation as well as the optimal use of commodity taxation on new durable goods.
|Date of creation:||10 Mar 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden|
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
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.:
- Thomas Aronsson Aronsson & Thomas Jonsson & Tomas Sjögren, 2006.
"Environmental Policy and Optimal Taxation in a Decentralized Economic Federation,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 62(3), pages 437-454, September.
- Aronsson, Thomas & Jonsson, Thomas & Sjögren, Tomas, 2006. "Environmental Policy and Optimal Taxation in a Decentralized Economic Federation," Umeå Economic Studies 669, Umeå University, Department of Economics.
- Thomas W. Gilligan, 2004. "Lemons and Leases in the Used Business Aircraft Market," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 1157-1186, October.
- Marco Runkel, 2004. "Efficient Tax-Subsidy for a Polluting Durable Good Industry without Commitment Ability," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(4), pages 494-, December.
- A. B. Atkinson, 1977.
"Optimal Taxation and the Direct versus Indirect Tax Controversy,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 10(4), pages 590-606, November.
- Anthony B. Atkinson, 1976. "Optimal Taxation and the Direct versus Indirect Tax Controversy," Working Papers 247, Queen's University, Department of Economics.
- Ordover, J. A. & Phelps, E. S., 1979. "The concept of optimal taxation in the overlapping-generations model of capital and wealth," Journal of Public Economics, Elsevier, vol. 12(1), pages 1-26, August.
- BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, 1997.
"Redistribution with unobservable bequests: a case for taxing capital income,"
CORE Discussion Papers
1997070, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 2000. " Redistribution with Unobservable Bequests: A Case for Taxing Capital Income," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 253-67, June.
- BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, . "Redistribution with unobservable bequests: a case for taxing capital income," CORE Discussion Papers RP 1457, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Brett, Craig, 1998. "A note on nonlinear taxation in an overlapping generations model," MPRA Paper 8776, University Library of Munich, Germany.
- Naito, Hisahiro, 1999. "Re-examination of uniform commodity taxes under a non-linear income tax system and its implication for production efficiency," Journal of Public Economics, Elsevier, vol. 71(2), pages 165-188, February.
- Alessandro Lizzeri & Igal Hendel, 1999.
"Adverse Selection in Durable Goods Markets,"
American Economic Review,
American Economic Association, vol. 89(5), pages 1097-1115, December.
- Stern, Nicholas, 1982. "Optimum taxation with errors in administration," Journal of Public Economics, Elsevier, vol. 17(2), pages 181-211, March.
- Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
- Robert H. Porter & Peter Sattler, 1999. "Patterns of Trade in the Market for Used Durables: Theory and Evidence," NBER Working Papers 7149, National Bureau of Economic Research, Inc.
- Pirttila, Jukka & Tuomala, Matti, 2001. "On optimal non-linear taxation and public good provision in an overlapping generations economy," Journal of Public Economics, Elsevier, vol. 79(3), pages 485-501, March.
When requesting a correction, please mention this item's handle: RePEc:hhs:umnees:0732. 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: (David Skog)
If references are entirely missing, you can add them using this form.