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Comparison of Nash and evolutionary stable equilibrium in asymmetric tax competition

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  • Philipowski, Robert

Abstract

We show that under suitable assumptions the evolutionary stable tax rate in asymmetric tax competition is strictly lower than all tax rates obtained in Nash equilibrium, generalizing in this way a recent result by Sano (Evolutionary and Institutional Economics Review 9 (2012), S1–S23) and Wagener (International Economic Review 54 (2013), 1251–1264) obtained in the context of symmetric tax competition. Our assumptions are satisfied in several models of capital and commodity tax competition.

Suggested Citation

  • Philipowski, Robert, 2015. "Comparison of Nash and evolutionary stable equilibrium in asymmetric tax competition," Regional Science and Urban Economics, Elsevier, vol. 51(C), pages 7-13.
    • Handle: RePEc:eee:regeco:v:51:y:2015:i:c:p:7-13
    DOI: 10.1016/j.regsciurbeco.2014.12.003
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    Cited by:

    1. Ana B. Ania & Andreas Wagener, 2021. "Laboratory federalism with public funds sharing," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1047-1065, July.
    2. Robert Philipowski, 2016. "Spiteful behavior can make everybody better off," Evolutionary and Institutional Economics Review, Springer, vol. 13(1), pages 113-116, June.
    3. Andreas Wagener, 2016. "Evolutionary Stability in Fiscal Competition," CESifo Working Paper Series 5791, CESifo.
    4. Bin Wu & Xuefei Xu & Zhenzhong Feng, 2018. "Investment Promotion, Fiscal Competition and Economic Growth Sustainability," Sustainability, MDPI, vol. 10(1), pages 1-12, January.

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    More about this item

    Keywords

    Asymmetric tax competition; Nash equilibrium; Evolutionary stable strategy;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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