Gale's Fixed Tax for Exchanging Houses

Tommy Andersson, Lars Ehlers, Lars-Gunnar Svensson () and Ryan Tierney
Additional contact information
Lars-Gunnar Svensson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, https://sites.google.com/site/lgstorson/

No 2018:17, Working Papers from Lund University, Department of Economics

Abstract: We consider 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. We show that if a rule satisfies individual rationality, strategyproofness, 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 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 assignment using the agents' valuations adjusted with the fixed tax if the induced preferences are strict.

Keywords: Fixed Tax; Exchanges; Top Trading (search for similar items in EconPapers)
JEL-codes: C71 C78 D63 D71 D78 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2018-06-20, Revised 2021-04-06
New Economics Papers: this item is included in nep-des and nep-gth
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Related works:
Journal Article: Gale’s Fixed Tax for Exchanging Houses (2022)
Working Paper: Gale's fixed tax for exchanging houses (2018)
Working Paper: Gale's Fixed Tax for Exchanging Houses (2018)
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