This paper models the behavior of states in a federal country wising to attract foreign firms to locate within their own individual jurisdictions. The essential intertemporal character of this decision is modeled as a multi-stage game to attract such foreign investment in these states. It is...

This paper models the behavior of states in a federal country wishing to attract foreign firms to locate within their own individual jurisdictions. The essential intertemporal character of this decision is modeled as a multi-stage game to attract such foreign investment in these states. It is...

We model competitive bidding by states (in a federal structure) to attract investments. This process involves a stage game rather than a single-stage prisoner's dilemma or repeated game. The offering of competitive subsidies involves a cost. The benefit consists of: i) The welfare enhancement of...