The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Portrait of Tommy Andersson. Photo.

Tommy Andersson

Professor

Portrait of Tommy Andersson. Photo.

Gale's Fixed Tax for Exchanging Houses

Author

  • Tommy Andersson
  • Lars Ehlers
  • Lars-Gunnar Svensson
  • Ryan Tierney

Summary, in English

We consider taxation of exchanges among a set of agents in which each agent owns one object. Agents may have different valuations for the objects, and they need to pay taxes for exchanges. We show that, if a rule satisfies individual rationality, strategy-proofness, constrained efficiency, weak anonymity, and weak consistency, then it is either the no-trade rule or a fixed-tax core rule. For the latter rules, whenever any agent exchanges an object, the agent pays the same fixed tax (a lump sum payment that is identical for all agents) independently of which object the agent consumes. Gale’s top trading cycles algorithm finds the final assignment using the agents’ valuations adjusted with the fixed tax if the induced preferences are strict.

Department/s

  • Department of Economics

Publishing year

2022-03-15

Language

English

Pages

3110-3128

Publication/Series

Mathematics of Operations Research

Volume

47

Issue

4

Document type

Journal article

Publisher

Informs

Topic

  • Economics

Status

Published

ISBN/ISSN/Other

  • ISSN: 0364-765X