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Further Analysis on Public-Good Provision in a Repeated-Game Setting

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Listed:
  • Keisuke Kawachi
  • Hikaru Ogawa

Abstract

In a model of privately provided public goods within a repeated-game setting, Pecorino (1999) shows that it is not only possible to maintain cooperation, but it is "easy" in a large economy. Models of privately provided public goods are closely related to interregional tax competition models with spillovers in public-good provision. This paper reexamines the argument of Pecorino in an infinitely repeated interaction model of interregional tax competition. The results show that in a large economy, while the trigger strategy supports the efficient tax rate if there exists substantial spillover of public goods, it fails to do so if there are few benefit spillovers.

Suggested Citation

  • Keisuke Kawachi & Hikaru Ogawa, 2006. "Further Analysis on Public-Good Provision in a Repeated-Game Setting," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(3), pages 339-352, September.
  • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200609)62:3_339:faoppi_2.0.tx_2-r
    DOI: 10.1628/001522106X153400
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    References listed on IDEAS

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    1. Wildasin, David E., 1989. "Interjurisdictional capital mobility: Fiscal externality and a corrective subsidy," Journal of Urban Economics, Elsevier, vol. 25(2), pages 193-212, March.
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    8. Boadway, Robin & Hayashi, Masayoshi, 1999. "Country size and the voluntary provision of international public goods," European Journal of Political Economy, Elsevier, vol. 15(4), pages 619-638, November.
    9. Martin McGuire, 1974. "Group size, group homo-geneity, and the aggregate provision of a pure public good under cournot behavior," Public Choice, Springer, vol. 18(1), pages 107-126, June.
    10. Hikaru Ogawa, 2006. "Tax competition, spillovers, and subsidies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(4), pages 849-858, December.
    11. Tilman Klumpp, 2012. "Finitely Repeated Voluntary Provision of a Public Good," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 547-572, August.
    12. Ratna K. Shrestha & James P. Feehan, 2002. "Contributions to International Public Goods and the Notion of Country Size," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(4), pages 551-551, December.
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    Citations

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    Cited by:

    1. Hikaru Ogawa, 2007. "Strategic Taxation on Mobile Capital with Spillover Externality," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 33-45, March.
    2. repec:eee:reveco:v:51:y:2017:i:c:p:431-443 is not listed on IDEAS
    3. 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.
    4. Tamai, Toshiki, 2010. "Public goods provision, redistributive taxation, and wealth accumulation," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1067-1072, December.
    5. repec:eee:ecmode:v:68:y:2018:i:c:p:409-415 is not listed on IDEAS
    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. 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.

    More about this item

    Keywords

    voluntary provision; tax competition; spillovers; group size; repeated game;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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