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Implicit tax co-ordination under repeated policy interactions

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  • Marco Cotenaro
  • Jean-Pierre Vidal

Abstract

In the context of a stylised game theoretical framework of capital tax competition, we show that when repeated policy interactions are associated to a systematic punishment of the deviating policymaker, a co-ordinated outcome can be the solution to the non co-operative tax game. This result suggests that explicit forms of policy co-ordination, such as a centralised tax authority, could in fact be largely unnecessary.

Suggested Citation

  • Marco Cotenaro & Jean-Pierre Vidal, 2006. "Implicit tax co-ordination under repeated policy interactions," Recherches économiques de Louvain, De Boeck Université, vol. 72(1), pages 5-18.
  • Handle: RePEc:cai:reldbu:rel_721_0005
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Itaya, Jun-ichi & Okamura, Makoto & Yamaguchi, Chikara, 2014. "Partial tax coordination in a repeated game setting," European Journal of Political Economy, Elsevier, vol. 34(C), pages 263-278.
    2. Thomas Eichner & Rüdiger Pethig, 2013. "Self-enforcing capital tax coordination," Volkswirtschaftliche Diskussionsbeiträge 160-13, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    3. Yutao Han & Patrice Pieretti & Benteng Zou, 2013. "The Dynamics of the Location of Firms – A Revisit of Home-Attachment under Tax Competition," CREA Discussion Paper Series 13-15, Center for Research in Economic Analysis, University of Luxembourg.
    4. Buettner, Thiess & von Schwerin, Axel, 2016. "Yardstick competition and partial coordination: Exploring the empirical distribution of local business tax rates," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 178-201.
    5. Jun-ichi Itaya & Makoto Okamura & Chikara Yamaguchi, 2016. "Implementing partial tax harmonization in an asymmetric tax competition game with repeated interaction," Canadian Journal of Economics, Canadian Economics Association, vol. 49(4), pages 1599-1630, November.
    6. Satoshi Kasamatsu & Hikaru Ogawa, 2017. "International Capital Market and Repeated Tax Competition," CIRJE F-Series CIRJE-F-1071, CIRJE, Faculty of Economics, University of Tokyo.
    7. repec:eee:reveco:v:51:y:2017:i:c:p:431-443 is not listed on IDEAS
    8. Itaya, Jun-ichi & Okamura, Makoto & Yamaguchi, Chikara, 2008. "Are regional asymmetries detrimental to tax coordination in a repeated game setting?," Journal of Public Economics, Elsevier, pages 2403-2411.
    9. Ogawa, Hikaru & Wang, Wenming, 2016. "Asymmetric tax competition and fiscal equalization in a repeated game setting," International Review of Economics & Finance, Elsevier, vol. 41(C), pages 1-10.
    10. Wolfgang Eggert & Jun-Ichi Itaya, 2014. "Tax Rate Harmonization, Renegotiation, and Asymmetric Tax Competition for Profits with Repeated Interaction," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(5), pages 796-823, October.
    11. repec:eee:poleco:v:49:y:2017:i:c:p:1-23 is not listed on IDEAS
    12. Wenming Wang & Keisuke Kawachi & Hikaru Ogawa, 2014. "Fiscal Transfer in a Repeated-Interaction Model of Tax Competition," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(4), pages 556-566, December.
    13. Itaya, Jun-ichi & Okamura, Makoto & Yamaguchi, Chikara, 2008. "Are regional asymmetries detrimental to tax coordination in a repeated game setting?," Journal of Public Economics, Elsevier, pages 2403-2411.
    14. Jun-ichi Itaya & Makoto Okamura & Chikara Yamaguchi, 2011. "On the Sustainability of Partial Tax Harmonization among Asymmetric Countries," ANU Working Papers in Economics and Econometrics 2011-540, Australian National University, College of Business and Economics, School of Economics.
    15. Blesse, Sebastian & Martin, Thorsten, 2015. "Let's stay in touch - evidence on the role of social learning in local tax interactions," ZEW Discussion Papers 15-081, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. Itaya, Jun-ichi & Yamaguchi, Chikara, 2015. "Does Endogenous Timing Matter in Implementing Partial Tax Harmonization?," Discussion paper series. A 286, Graduate School of Economics and Business Administration, Hokkaido University.
    17. Patrice Pieretti & Skerdilajda Zanaj & Benteng Zou, 2012. "On the long run economic performance of small economies," CREA Discussion Paper Series 12-14, Center for Research in Economic Analysis, University of Luxembourg.

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