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Temptation in consumption and optimal taxation
Department of Economics, University of Bologna, Italy.
Umeå universitet, Samhällsvetenskapliga fakulteten, Handelshögskolan vid Umeå universitet.ORCID-id: 0000-0003-4145-7894
2023 (engelsk)Inngår i: Journal of Economic Behavior and Organization, ISSN 0167-2681, E-ISSN 1879-1751, Vol. 205, s. 687-707Artikkel i tidsskrift (Fagfellevurdert) Published
Abstract [en]

This article aims to integrate temptation preferences into the theory of optimal taxation with heterogenous agents and asymmetric information. Consumers are tempted to over-consume a commodity which may lead to an over-supply of labor. Resisting this temptation implies a utility cost and any policy that reduces this cost is welfare improving. We uncover novel channels for government intervention and the interaction between the welfare improving and redistributive roles of public policy. We also identify a commitment mechanism that works through the endogenous labor choice and affects the design and effectiveness of the optimal tax policy.

sted, utgiver, år, opplag, sider
Elsevier, 2023. Vol. 205, s. 687-707
Emneord [en]
Commodity taxation, Income taxation, Optimal taxation, Redistribution, Self-control, Temptation
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Identifikatorer
URN: urn:nbn:se:umu:diva-201995DOI: 10.1016/j.jebo.2022.10.030ISI: 000913503800001Scopus ID: 2-s2.0-85144010615OAI: oai:DiVA.org:umu-201995DiVA, id: diva2:1722548
Tilgjengelig fra: 2022-12-29 Laget: 2022-12-29 Sist oppdatert: 2024-07-02bibliografisk kontrollert

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