Abstract

https://ssrn.com/abstract=2820299
 


 



Voluntary Taxation and Beyond - The Promise of Social-Contracting Voting Mechanisms


Ian Ayres


Yale University - Yale Law School; Yale University - Yale School of Management

August 8, 2016

Yale Law & Economics Research Paper No. 562

Abstract:     
Would you volunteer to pay a carbon tax if 99% of other Americans also volunteered to pay such a tax? Instead of traditional referenda, it is possible to structure plebiscites which would only bind a subset of the population (for example, to be subject to a carbon tax) if that subset’s individually chosen conditions for participation are met. While provision-point mechanisms with exogenously set provision points have garnered billions of dollars in private contributions, a broader class of “social contracting” mechanisms exist that allow individuals to bid on their preferred provision points. This article shows how both partial and probabilistic bidding schemes might foster voluntary subpopulation participation in a range of public good applications, and reports results from a series of randomized surveys of Internet respondents assessing the potential support for such subgroup “social contracting.” The respondent bids would, for example, support an equilibrium in which approximately 25% of the public would voluntarily commit to pay an additional 10% tax on electricity. Provision-point bidding and probability-bidding mechanisms are shown to increase willingness to participate both in voluntary taxation and in civil disobedience experiments. A probability-bidding mechanism increases the expected number of civil disobedience volunteers more than 9-fold relative to a mechanism where the probability of participation is exogenously given. In a separate sexual assault reporting experiment, subgroup social contracting is shown to shift 10% of subjects from informal reporting to matching escrows without cannibalizing the proportion of subjects who report formally – thus enhancing the expected number of sexual assault complaints that will ultimately be investigated.

Number of Pages in PDF File: 38


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Date posted: August 12, 2016 ; Last revised: September 30, 2016

Suggested Citation

Ayres, Ian, Voluntary Taxation and Beyond - The Promise of Social-Contracting Voting Mechanisms (August 8, 2016). Yale Law & Economics Research Paper No. 562. Available at SSRN: https://ssrn.com/abstract=2820299 or http://dx.doi.org/10.2139/ssrn.2820299

Contact Information

Ian Ayres (Contact Author)
Yale University - Yale Law School ( email )
P.O. Box 208215
New Haven, CT 06520-8215
United States
203-432-7101 (Phone)
203-432-2592 (Fax)

Yale University - Yale School of Management
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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