von Neumann-Morgenstern stable sets of income tax rates in public good economies

DOI10.1007/S00199-007-0284-XMaRDI QIDQ943346zbMATH OpenOpenAlexFDO

Authors Toshiyuki Hirai

Publication date 9 September 2008

Published in Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/s00199-007-0284-x

zbMATH Keywords

Income tax ratePublic good economyvon Neumann-Morgenstern stable sets

Mathematics Subject Classification ID

Public goods (91B18) Trade models (91B60)

Review text

This paper studies the von Neumann-Morgenstern stable sets in public good economy where any allocation is achieved by proportional income tax system. The outcome of he economy is defined to be a set of tax rates. It is shown that if the core (as the set of tax rates) is non-empty it is a unique stable set. Else the set of tax rates is stable if and only if it is a singleton satisfying a certain condition. An example is given to illustrate the existence of such sets. The results of this paper can be regarded as suggesting a collective decision making for tax rates in public good economy. An example is given to show that it gives better results than the familiar majority voting.

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Cited in

(4)

• Von Neumann-Morgenstern stable sets of a patent licensing game: the existence proof
• Stable sets of allocations and the provision of public goods
• Fiscally stable income distributions under majority voting, Lorenz curves and bargaining sets
• Proportional taxation: Nonexistence of stable structures in an economy with a public good

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