I think this is a fun historical example. Ships passing through Denmark needed to pay a tax of 1-2% of the value of their cargo. They self-assessed that value.
The twist that makes it interesting was that the King could choose to purchase any cargo immediately at the reported value. If a ship underreported, they might save on tax, but they risked taking a hefty loss.
I have no idea how effective this was, but it's compelling. I wonder whether great self-regulation might need clever design like that example.
I think this is a fun historical example. Ships passing through Denmark needed to pay a tax of 1-2% of the value of their cargo. They self-assessed that value.
The twist that makes it interesting was that the King could choose to purchase any cargo immediately at the reported value. If a ship underreported, they might save on tax, but they risked taking a hefty loss.
I have no idea how effective this was, but it's compelling. I wonder whether great self-regulation might need clever design like that example.