On the existence of Nash equilibria in an asymmetric tax competition game

Emmanuelle TAUGOURDEAU () and Abderrahmane Ziad ()

Regional Science and Urban Economics, 2011, vol. 41, issue 5, pages 439-445

Abstract: In this methodological paper, we prove that the famous tax competition game introduced by Zodrow and Mieszkowski (1986) and Wildasin (1988) in which the capital is completely owned by foreigners possesses a Nash equilibrium even when the assumption of symmetric jurisdictions is dropped. The normality of both private and public goods is all that is needed concerning restrictions on preferences when a peculiar regime of taxation is ruled out. Moreover, we show that conditions about technology allowing for the existence of a Nash equilibrium are satisfied by most of the widely-used production functions.

Keywords: Tax; competition; Nash; equilibrium (search for similar items in EconPapers)
Date: 2011
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Persistent link: http://EconPapers.repec.org/RePEc:eee:regeco:v:41:y:2011:i:5:p:439-445

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