Interactions between government and firms: a differential game approach

Jorge Navas () and Jesus Marin-Solano

Annals of Operations Research, 2008, vol. 158, issue 1, 47-61

Abstract: In this paper we study an extended version of the model described in Gradus (J. Econ. 81:1092–1109, 1989 ) in order to determine the optimal taxation policy of a government and its effects on the stock of capital goods growth as a result of the activity developed by firms. It is shown that, by introducing a wealth tax, there exists an optimal wealth tax rate for which the open-loop/feedback Nash/Stackelberg equilibria coincide, maximizing the payments for both agents (government and firms), so that the open-loop Stackelberg equilibrium becomes both time consistent and subgame perfect. Copyright Springer Science+Business Media, LLC 2008

Keywords: Optimal profit taxation; Nash/Stackelberg equilibria; Time consistency (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10479-007-0248-3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:158:y:2008:i:1:p:47-61:10.1007/s10479-007-0248-3

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-007-0248-3

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().