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The efficient provision of public goods through non-distortionary tax contests


  • Giebe, Thomas
  • Schweinzer, Paul


We use a simple balanced budget contest to collect taxes on a private good in order to ?nance a pure public good. We show that-with an appropriately chosen structure of winning probabilities-this contest can provide the public good efficiently and without distorting private consumption. We provide extensions to multiple public goods and private taxation sources, asymmetric preferences, and show the mechanism’s robustness across these settings.

Suggested Citation

  • Giebe, Thomas & Schweinzer, Paul, 2011. "The efficient provision of public goods through non-distortionary tax contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 352, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  • Handle: RePEc:trf:wpaper:352

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    More about this item


    Taxation; Contests; Efficiency;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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