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Tax Competition Reconsidered

Amrita Dhillon (), Myrna Wooders and Benjamin Zissimos

No 602, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: In a classic model of tax competition, we show that the level of public good provision and taxation in a decentralized equilibrium can be efficient or inefficient with either too much, or too little public good provision. The key is whether there exists a unilateral incentive to deviate from the efficient state and, if so, whether this entails raising or lowering taxes. A priori, there is no reason to suppose the incentive is in either one direction or the other.

Keywords: Efficiency; Nash equilibrium; over-provision; tax competition; under-provision (search for similar items in EconPapers)
JEL-codes: C72 H21 H42 H73 R50 (search for similar items in EconPapers)
Date: 2006-01
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://www.accessecon.com/pubs/VUECON/vu06-w02.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: Tax Competition Reconsidered (2007) Downloads
Working Paper: Tax Competition Reconsidered (2001) Downloads
Working Paper: Tax Competition Reconsidered (2001) Downloads
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