Size effect, neighbour effect and peripheral effect in cross-border tax games

This paper analyses a game theoretic model of tax competition in a system where tax authorities are revenue optimisers and countries are differentiated by size. The model accommodates more than two countries. In equilibrium, larger countries set higher tax rates non-cooperatively. By applying the Hotelling linear model, this paper gives examples where the size effect, neighbourhood effect, and peripheral effect coexist and push up the tax rate in equilibrium.

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Year of publication:	2014
Authors:	Liu, Xin
Institutions:	Institut für Weltwirtschaft (IfW)
Subject:	tax competition \| cross-border shopping \| Nash equilibrium \| peripheral effects

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Extent:	application/pdf
Series:	Economics Discussion Papers. - ISSN 1867-8009.
Type of publication:	Book / Working Paper
Notes:	Number 2014-19
Classification:	H20 - Taxation, Subsidies, and Revenue. General ; H71 - State and Local Taxation, Subsidies, and Revenue ; H73 - Interjurisdictional Differentials and Their Effects ; R51 - Finance in Urban and Rural Economies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010956103