EconPapers    
Economics at your fingertips  
 

Taxation, redistribution, and observability in social dilemmas

Daniel Brent, Lata Gangadharan (), Anca Mihut and Marie Claire Villeval

Journal of Public Economic Theory, 2019, vol. 21, issue 5, 826-846

Abstract: In the presence of social dilemmas, cooperation is more difficult to achieve when populations are heterogeneous because of conflicting interests within groups. We examine cooperation in the context of a nonlinear common pool resource game, in which individuals have unequal extraction capacities and have to decide on their extraction of resources from the common pool. We introduce monetary and nonmonetary mechanisms in this environment. The two monetary mechanisms are tax extraction and redistribution of the tax revenue. These include a Pigovian per‐unit tax mechanism and an increasing block tax that only taxes units extracted above the social optimum. Another mechanism varies the observability of individual decisions. We find that the two tax and redistribution mechanisms reduce extraction, increase efficiency, and decrease inequality within groups. In contrast, observability impacts only the baseline condition by encouraging free‐riding instead of creating moral pressure to cooperate.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://doi.org/10.1111/jpet.12350

Related works:
Working Paper: Taxation, redistribution and observability in social dilemmas (2019)
Working Paper: Taxation, redistribution and observability in social dilemmas (2017) Downloads
Working Paper: Taxation, redistribution and observability in social dilemmas (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:21:y:2019:i:5:p:826-846

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-19
Handle: RePEc:bla:jpbect:v:21:y:2019:i:5:p:826-846