Coasean bargaining in the presence of Pigouvian taxation

MacKenzie, Ian A.; Ohndorf, Markus

doi:10.1016/j.jeem.2015.09.003

Cited by 11 publications

(7 citation statements)

References 36 publications

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“…Note that β(g(n), n) = n/ (2(n−1)). In the Appendix, we show that there is an equilibrium 20 A similar implication can be obtained from the results of the voluntary participation game for a public good mechanism (e.g., Saijo and Yamato, 1999;Shinohara, 2009; Furusawa and Konishi, 2011; Konishi and Shinohara, 2014). 21 The meaning of pivotal here is the same as that in our analysis: without a pivotal beneficiary, the public good is not provided.…”

Section: Equilibrium Level Of the Public Good When The Supplier's Barsupporting

confidence: 71%

“…Since Thus, the likelihood of the efficient provision of the public good is extremely low when the number of beneficiaries is large. 20 Intuitively, in their game, the probability of being pivotal to the public good provision affects the participation probability of each beneficiary. 21 Note that in our analysis, the probability of being pivotal is irrelevant.…”

Section: Analysis Under Parametric Functions 61 Number Of Consumers mentioning

confidence: 99%

“…Since g(n) ∈ [g n , g n ) from (19), then given that the number of contributors is n, the suppliers' payoff is maximized at g = g(n). Thus, (20) and (22) imply that the supplier's payoff when the number of contributors belongs to N 1 ∪ N 3 is less than π n S (g(n)). (21) implies that the supplier's payoff when the number of contributors belongs to N 2 is less than π n S (g(n)).…”

Section: Proof Of Theoremmentioning

confidence: 99%

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Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

Matsushima

Shinohara

2019

Journal of Public Economics

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We investigate public good provision through bilateral negotiations between a public-good supplier and the beneficiaries of the good. We find that although a prenegotiation commitment on the production level of the public good by the supplier enhances the internalization of beneficiaries' preferences, the good is not necessarily provided efficiently. We show that with the commitment, the supplier produces the public good at an efficient level in equilibrium if and only if its bargaining power is sufficiently weak. In addition, the public good may be produced excessively as a result of the commitment when the supplier's bargaining power is sufficiently strong.

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Section: Equilibrium Level Of the Public Good When The Supplier's Barsupporting

confidence: 71%

Section: Analysis Under Parametric Functions 61 Number Of Consumers mentioning

confidence: 99%

Section: Proof Of Theoremmentioning

confidence: 99%

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Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

Matsushima

Shinohara

2019

Journal of Public Economics

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“…Our theoretical analysis includes policy implications on combinations of policy instruments and voluntary negotiations. Several theoretical studies have shown that government interventions using subsidies and taxes may improve the efficiency of negotiation outcomes when the negotiation itself does not reach the first‐best efficient level (in situations different to ours; e.g., Luelfesmann et al, 2015; Lülfesmann, 2002; MacKenzie & Ohndorf, 2016; Rosenkranz & Schmitz, 2007). For the strategic delegation problem, we observe similar phenomena, conditional on the manipulability of the breakdown outcome.…”

Section: Introductionmentioning

confidence: 82%

Interregional negotiations and strategic delegation under government subsidy schemes

Shinohara

2020

J Public Economic Theory

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We examine the strategic delegation problem in the context of interregional negotiations under the subsidy policies of a central government. It is well known that when such negotiations are delegated to representatives, each region in a country elects its representative strategically, resulting in inefficient negotiation outcomes. This study focuses on a common subsidy policy called a cost‐matching grant to examine whether an optimal grant exists that restores the efficiency of negotiation outcomes. Our results show that the central government obtains this optimal grant if the manipulability of the negotiation breakdown outcome is sufficiently weak. The strength of the manipulability is important because introducing a grant generates a new kind of manipulation of negotiation breakdown outcomes. However, when a new representative is elected after a negotiation breaks down, the new manipulability is negated. Hence, the central government always obtains the optimal cost‐matching grant.

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“…Additionally, our tax and subsidy were product-specific, which was not the case in these previous experiments. Because our model integrated WTP, our study differs from recent theoretical contributions studying the Pigovian taxation with many details on market adjustments but without elicited WTP [26][27][28][29]. The methodology focusing on final products markets and consumers' perception was overlooked by many institutions, such as the IPCC [1].…”

Section: Background and Literaturementioning

confidence: 99%

A Tax Coming from the IPCC Carbon Prices Cannot Change Consumption: Evidence from an Experiment

Yokessa

Marette

2019

Sustainability

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This article compares a socially-optimal tax coming from a model integrating consumers’ preferences for various milks, with a tax directly computed from carbon emissions of milks with carbon prices given by the International Panel for Climate Change (IPCC). Regarding consumers’ preferences, we conducted an experiment in France for finding consumers’ willingness-to-pay (WTP) for different bottles coming from either cow’s milk or soy milk, under a regular or an organic process of production. This experiment shows higher WTPs for organic bottles than for regular bottles, and higher WTPs for soy milk than for cow’s milk. These WTPs were introduced into a model estimating the effects of regulatory instruments. From this model using WTPs, it was shown that, for milk coming from cows and soy, a tax on regular bottles and a subsidy on organic bottles maximized the consumers’ welfare. This tax on regular bottles was stronger than the tax that was alternatively estimated with the emissions and IPCC carbon prices. Indeed, a tax based on the IPCC carbon prices seemed too weak for efficiently changing the consumption towards sustainable products.

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Coasean bargaining in the presence of Pigouvian taxation

Cited by 11 publications

References 36 publications

Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

Interregional negotiations and strategic delegation under government subsidy schemes

A Tax Coming from the IPCC Carbon Prices Cannot Change Consumption: Evidence from an Experiment

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