We use a simple balanced budget contest to collect taxes on a private good in order to ?nance a pure public good. We show that-with an appropriately chosen structure of winning probabilities-this contest can provide the public good efficiently and without distorting private consumption. We...

We use a simple balanced budget contest to collect taxes on a private good in order to finance a pure public good. We show that-with an appropriately chosen structure of winning probabilities-this contest can provide the public good efficiently and without distorting private consumption. We...

Decision-making processes are studied using non-standard all-pay structures. Our interest is motivated by regulatory, political, legal, military, and economic applications in which individual actions determine the consequences for a larger group or the general public. The common features of...

We revisit the classical result that taxation of private consumption is distortionary and therefore precludes the efficient provision of public goods. We introduce a nonlinear consumption tax which we call a ‘tax lottery’. Under this scheme, an ad-valorem consumption tax is supplemented with...

We study decision making processes with non-standard all-pay structures. In our first group of applications, individual members of some institution—due to public pressure or expectation—propose reductions of their own income, e.g., corporate board members reducing their bonus payments in an...