Tommy Andersson
Professor
Gale's Fixed Tax for Exchanging Houses
Author
Summary, in English
We consider the taxation of exchanges among a set of agents where each agent owns one object. Agents may have different valuations for the objects and they need to pay taxes for exchanges. Using basic properties, we show that if pairwise (or some) exchanges of objects are allowed, then all exchanges (in any possible manner) must be feasible. Furthermore, whenever any agent exchanges his object, he pays the same fixed tax (a lump sum payment which is identical for all agents) independently of which object he consumes. Gale's top trading cycles algorithm finds the final allocation using the agents' valuations adjusted with the fixed tax. Our mechanisms are in stark contrast to Clarke-Groves taxation schemes or the max-med schemes proposed by Sprumont (2013).
Department/s
- Department of Economics
Publishing year
2018
Language
English
Publication/Series
Working Papers
Issue
2018:17
Links
Document type
Working paper
Topic
- Economics
Keywords
- Fixed Tax
- Exchanges
- Top Trading
- C71
- C78
- D63
- D71
- D78
Status
Published