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Further Consideration of the Existence of Nash Equilibria in an Asymmetric Tax Competition Game

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In this methodological paper, we prove that the key tax competition game introduced by Zodrow and Mieszkowski (1986) and Wildasin (1988), extended to asymmetric regions, possesses a Nash equilibrium under several assumptions commonly adopted in the literature: goods are supposed to be normal; the public good is assumed to be a desired good; the demand for capital is concave; and the elasticity of the marginal product is bounded. The general framework we develop enrables us to obtain very tractable results. By applying our method to several examples with standard production functions, we show that it is easy to use

Suggested Citation

  • Emmanuelle Taugourdeau & Abderrahmane Ziad, 2010. "Further Consideration of the Existence of Nash Equilibria in an Asymmetric Tax Competition Game," Documents de travail du Centre d'Economie de la Sorbonne 10037, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:10037
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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