Search costs and corporate income tax competition
If a small cost applies for learning the corporate tax rules in different countries, this can completely eliminate tax competition. This modified version of the Diamond paradox and can also explain the empirically observed tax cuts cum base broadening.
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- McAfee R. Preston, 1995. "Multiproduct Equilibrium Price Dispersion," Journal of Economic Theory, Elsevier, vol. 67(1), pages 83-105, October.
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Munich Reprints in Economics
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- Burdett, Kenneth & Judd, Kenneth L, 1983. "Equilibrium Price Dispersion," Econometrica, Econometric Society, vol. 51(4), pages 955-969, July.
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- Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
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