Revenue equivalence and income taxation

Journal article

Publication Details

Author(s): Grimm V, Schmidt U
Journal: Journal of Economics and Finance
Publisher: Springer Verlag
Publication year: 2000
Volume: 24
Journal issue: 1
Pages range: 56-63
ISSN: 1055-0925
eISSN: 1938-9744
Language: English


This paper considers the classical independent private values model of auction theory in the presence of income taxation. We show that revenue equivalence remains valid if income taxes are proportional. Progressive and regressive taxes lead, in general, to asymmetries between bidders with the well-known consequence that revenue equivalence no longer holds. However, if symmetry of the bidders is maintained, progressive (regressive) income tax implies a higher (lower) expected revenue in first-price than in second-price auctions.

FAU Authors / FAU Editors

Grimm, Veronika Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Wirtschaftstheorie

How to cite

Grimm, V., & Schmidt, U. (2000). Revenue equivalence and income taxation. Journal of Economics and Finance, 24(1), 56-63.

Grimm, Veronika, and Ulrich Schmidt. "Revenue equivalence and income taxation." Journal of Economics and Finance 24.1 (2000): 56-63.


Last updated on 2018-14-07 at 20:23