Our paper extends the capital tax competition literature by incorporating heterogeneous capital and agglomeration. Our model nests the standard tax competition model as well as the special case in which there is agglomeration but no firm/capital heterogeneity and the opposite case, firm...

This paper develops a model in which competing governments offer financial incentives to induce individual firms to locate within their jurisdictions. Equilibrium is described under three specifications of the supplementary taxes. There is no misallocation of capital under two of these...

An "ex post" social welfare function is used to evaluate alternative healthcare systems. If a society is averse to inequality and there is some income disparity, social welfare under private healthcare insurance is sometimes higher and sometimes lower than social welfare under public healthcare....

The implications of a societal aversion to inequality for the optimal structure of the health care system are studied. The agents are assumed to be ex ante identical, but to differ ex post in the state of their health. Inequality aversion is introduced by postulating a strictly...