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Partial tax coordination in a repeated game setting

Author

Listed:
  • Jun-ichi Itaya

    () (Hokkaido University)

  • Makoto Okamuraz

    () (Hiroshima University)

  • Chikara Yamaguchix

    () (Hiroshima Shudo University)

Abstract

This paper addresses the problem of partial tax coordination among regional or national sovereign governments in a repeated game setting. We show that partial tax coordination is more likely to prevail if the number of regions in a coalition subgroup is smaller and the number of existing regions in the entire economy is larger. We also show that under linear utility, partial tax coordination is more likely to prevail if the preference for a local public good is stronger. The main driving force for these results is the response of the intensity of tax competition. The increased (decreased) intensity of tax competition makes partial tax coordination more (less) sustainable.

Suggested Citation

  • Jun-ichi Itaya & Makoto Okamuraz & Chikara Yamaguchix, 2009. "Partial tax coordination in a repeated game setting," Working Papers 2009/15, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2009/10/doc2009-15
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:reveco:v:51:y:2017:i:c:p:431-443 is not listed on IDEAS
    2. Thomas Eichner & Rüdiger Pethig, 2014. "Stable and sustainable global tax coordination with Leviathan governments," Volkswirtschaftliche Diskussionsbeiträge 166-14, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    3. 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.
    4. 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.
    5. 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.
    6. repec:eee:touman:v:60:y:2017:i:c:p:442-453 is not listed on IDEAS
    7. Eichner, Thomas & Pethig, Rüdiger, 2015. "A note on stable and sustainable global tax coordination with Leviathan governments," European Journal of Political Economy, Elsevier, vol. 37(C), pages 64-67.
    8. 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.
    9. repec:eee:poleco:v:49:y:2017:i:c:p:1-23 is not listed on IDEAS

    More about this item

    Keywords

    Partial tax coordination; repeated game; tax competition;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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