Resource title

Pawns and Queens Revisited : public provision of private goods when individuals make mistakes

Resource image

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Resource description

This paper analyses the optimal tax policy and public provision of private goods when individuals differ in two respects: income-earning ability and rationality. Publicly provided goods should be overprovided or subsidised, relative to the decentralised optimum, if society?s marginal valuation of them exceeds the individual valuation and if these goods help relax the self-selection constraints, formulated in a new way. Optimal marginal income tax rates are shown to differ from the standard rules if publicly provided goods and labour supply are related.

Resource author

Jukka Pirttilä, Sanna Tenhunen

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18830

Resource license

Adapt according to the presented license agreement and reference the original author.