We analyze the optimal tax choices of a revenue-maximizing government that levies taxes from firms of which the true degree of mobility is ex ante unknown. Differential tax treatment of immobile and mobile firms is ruled out, but the government may learn from the firms' location responses to...

When a region successfully attracts a large firm by offering tax concessions, outright subsidies etc., the firm often commits itself to performance targets in terms of investment or employment. This paper interprets these contractually fixed targets as a consequence of incomplete information. It...

When a region successfully attracts a large firm by offering tax concessions, outright subsidies etc., the firm often commits itself to performance targets in terms of investment or employment. This paper interprets these contractually fixed targets as a consequence of incomplete information. It...

We analyze the optimal tax choices of a revenue-maximizing government that levies taxes from firms of which the true degree of mobility is ex ante unknown. Differential tax treatment of immobile and mobile firms is ruled out, but the government may learn from the firms’ location responses to...