HUSCAP logo Hokkaido Univ. logo

Hokkaido University Collection of Scholarly and Academic Papers >
Graduate School of Economics and Business / Faculty of Economics and Business >
Discussion paper >
Series A >

Does Endogenous Timing Matter in Implementing Partial Tax Harmonization?

Files in This Item:
DPA286.pdf426.35 kBPDFView/Open
Please use this identifier to cite or link to this item:

Title: Does Endogenous Timing Matter in Implementing Partial Tax Harmonization?
Authors: Itaya, Jun-ichi Browse this author →KAKEN DB
Yamaguchi, Chikara Browse this author →KAKEN DB
Keywords: Tax competition
Tax harmonization
Endogenous timing
Repeated game
Issue Date: Jun-2015
Publisher: Graduate School of Economics and Business Administration, Hokkaido University
Journal Title: Discussion Paper, Series A
Volume: 286
Start Page: 1
End Page: 34
Abstract: The endogenous timing of moves is analyzed in a repeated game setting of capital tax competition, where a subgroup of countries implementing partial tax harmonization and outside countries choose whether to set capital taxes sequentially or simultaneously. It is shown that the simultaneous-move outcome prevails in every stage game of the infinitely repeated tax-competition game as its subgame-perfect Nash equilibrium (SPNE) if a taxunion consists of similar countries, whereas both the simultaneous-move and sequentialmove (Stackelberg) outcomes can be sustained as SPNEs when a tax-union consists of dissimilar countries. This is in sharp contrast with the finding of Ogawa (2013). In his two-stage game, when asymmetric countries in terms of productivity have opposite incentives towards the terms of trade in order to manipulate the price of capital in their favor, there exists only a simultaneous-move Nash equilibrium. This difference arises from the fact that infinite repetition is able to support a wider range of behavior that is not a Nash equilibrium of the one-shot stage game of the repeated tax-competition game, such as a Stackelberg follower’s strategy.
Type: bulletin (article)
Appears in Collections:Discussion paper > Series A

Export metadata:

OAI-PMH ( junii2 , jpcoar_1.0 )

MathJax is now OFF:


 - Hokkaido University