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Optimal Provision of Public Goods with Rank Dependent Expected Utility

Forfattere:

Eide, Erling

År:

2003

Referanse:

Public Finance/Finances Publiques

No. 3-4, Vol. 53, 1998 (published 2003), s. 296-311

Summary

In this paper the theory of rank-dependent expected utility (RDEU) is substituted for the theory of expected utility (EU) in a model of optimal provision of public goods. The substitution generalizes the Samuelson rule, previously modified to include deadweight loss and tax evasion loss. Under given assumptions it is demonstrated that the marginal cost of public funds is higher in a RDEU model than in a corresponding EU model.

Prosjekt info:

Oppdragsgiver: Skattedirektoratet
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 2411 - Svart økonomi i Norge