Grimm V, Schmidt U (2000)
Publication Language: English
Publication Type: Journal article
Publication year: 2000
Publisher: Springer Verlag
Book Volume: 24
Pages Range: 56-63
Journal Issue: 1
URI: http://www.springerlink.com/content/c5g10g42t285j630/
DOI: 10.1007/BF02759695
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.
APA:
Grimm, V., & Schmidt, U. (2000). Revenue equivalence and income taxation. Journal of Economics and Finance, 24(1), 56-63. https://dx.doi.org/10.1007/BF02759695
MLA:
Grimm, Veronika, and Ulrich Schmidt. "Revenue equivalence and income taxation." Journal of Economics and Finance 24.1 (2000): 56-63.
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