We introduce tax competition for mobile labor into an optimal-taxation model with two skill levels. We analyze a symmetric subgame-perfect Nash equilibrium of the game between two governments and two taxpayer populations. Tax competition reduces the distortion from the informational asymmetry...

We introduce tax competition for mobile labor into an optimal-taxation model with two skill levels. We analyze a symmetric subgame-perfect Nash equilibrium of the game between two governments and two taxpayer populations. Tax competition reduces the distortion from the informational asymmetry...

When firms set prices and face entry costs, efficiency in production and in entry are not simultaneously achieved, generating the possibility that regulatory interventions can lead to efficiency enhancements. We show through the Bertrand model that in markets with public entry and regular...