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Gale's Fixed Tax for Exchanging Houses

Andersson, Tommy LU ; Ehlers, Lars; Svensson, Lars-Gunnar LU and Tierney , Ryan (2018) In Working Papers
Abstract
We consider the 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. Using basic properties, we show that if pairwise (or some) exchanges of objects are allowed, then all exchanges (in any possible manner) must be feasible. Furthermore, 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 allocation using the agents' valuations adjusted with the fixed tax. Our mechanisms are in stark contrast to Clarke-Groves taxation schemes or the max-med schemes proposed by... (More)
We consider the 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. Using basic properties, we show that if pairwise (or some) exchanges of objects are allowed, then all exchanges (in any possible manner) must be feasible. Furthermore, 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 allocation using the agents' valuations adjusted with the fixed tax. Our mechanisms are in stark contrast to Clarke-Groves taxation schemes or the max-med schemes proposed by Sprumont (2013). (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Fixed Tax, Exchanges, Top Trading, C71, C78, D63, D71, D78
in
Working Papers
issue
2018:17
pages
23 pages
language
English
LU publication?
yes
id
48a55e9e-4488-4589-b9b8-42916eb76167
alternative location
https://swopec.hhs.se/lunewp/abs/lunewp2018_017.htm
date added to LUP
2018-08-01 10:46:26
date last changed
2018-11-21 21:40:58
@misc{48a55e9e-4488-4589-b9b8-42916eb76167,
  abstract     = {We consider the 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. Using basic properties, we show that if pairwise (or some) exchanges of objects are allowed, then all exchanges (in any possible manner) must be feasible. Furthermore, 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 allocation using the agents' valuations adjusted with the fixed tax. Our mechanisms are in stark contrast to Clarke-Groves taxation schemes or the max-med schemes proposed by Sprumont (2013). },
  author       = {Andersson, Tommy and Ehlers, Lars and Svensson, Lars-Gunnar and Tierney ,  Ryan  },
  keyword      = {Fixed Tax,Exchanges,Top Trading,C71,C78,D63,D71,D78},
  language     = {eng},
  note         = {Working Paper},
  number       = {2018:17},
  pages        = {23},
  series       = {Working Papers},
  title        = {Gale's Fixed Tax for Exchanging Houses},
  year         = {2018},
}