There is a growing concern that governments lose substantial corporate tax revenue because of profit shifting through transfer-pricing and thin-capitalization strategies. Existing literature studies profit shifting and transfer pricing separately. In practice, the choice of debt-to-asset ratios...

Predator-prey relationships account for an important part of all interactions between species. In this paper we provide a microfoundation for such predator-prey relations in a food chain. Basic entities of our analysis are representative organisms of species modelled similar to economic...

We analyse tax competition with corporate income taxes in a common market where tax revenues are allocated according to an apportionment formula. Generally, tax competition is sharper (i.e., equilibrium tax rates are lower) the more tax-elastic is the apportionment formula. This depends on the...

In recent years a large number of experimental studies have documented the existence of strong reciprocity among humans. Strong reciprocity means that people willingly repay gifts and punish the violation of cooperation and fairness norms even in anonymous one-shot encounters with genetically...

We demonstrate that the choice of the transfer price and its effect on intra-firm trade and investment depends on the probability of detection and thus on the measure, on which tax authorities base their audit. A policy implication of the paper is that it should be preferable to condition audits...

This paper examines the flexibility of multinational firms to use income-shifting strategies within a tax year to react to operating losses. First, we develop an analytical model that considers how affiliate losses can be adjusted by using the transfer prices of tangible and intangible assets,...

Based on economic methodology we model an ecosystem with two species in predator-prey relationship: mice feed on grain and grain feeds on a resource. With optimizing behaviour of individual organisms a short-run ecosystem equilibrium is defined and characterized that depends on the farmer’s...

In this paper we develop a micro ecosystem model whose basic entities are representative organisms which behave as if maximizing their net offspring under constraints. Net offspring is increasing in prey biomass intake, declining in the loss of own biomass to predators and Allee's Law applies....

This study develops theory and discusses implications of inflexibility in tax-motivated income shifting. We show that inflexibility to adjust income-shifting strategies within a tax year in response to losses implies that income-shifting incentives are based on the expected rather than the...