The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Jul, 1977, Volume 45, Issue 5
https://doi.org/0012-9682(197707)45:5<1137:PAT>2.0.CO;2-W
p. 1137-1161
Mordecai Kurz, Robert J. Aumann
A treatment of taxation based on considerations of political and economic power in a majority-vote democratic context is the topic of this article. Agents are endowed with gross incomes and have concave von Neumann-Morgenstern utilities for money. Taxation policies are decided by majority vote, but each citizen retains a certain basic right that prevents the majority from arbitrarily expropriating his income. The resulting non-transferable utility cooperative game is analyzed by means of the Harsanyi-Shapley-Nash value.
