Nash equilibria in models of fiscal competition

This paper analyzes Nash equilibria in a simple model of an economy with jurisdictions engaging in fiscal competition. Small-number Nash equilibria in which tax rates are the strategic variables are shown not to coincide with Nash equilibria in which public expenditure levels are the strategic varia...

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Bibliographic Details
Published in:Journal of public economics 1988-03, Vol.35 (2), p.229-240
Main Author: Wildasin, David E.
Format: Article
Language:English
Subjects:
Competition
Economic models
Economic theory
Equilibrium
Fiscal policy
Fiscal theory
Game theory
Mathematical analysis
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Summary:This paper analyzes Nash equilibria in a simple model of an economy with jurisdictions engaging in fiscal competition. Small-number Nash equilibria in which tax rates are the strategic variables are shown not to coincide with Nash equilibria in which public expenditure levels are the strategic variables.
ISSN:0047-2727
1879-2316
DOI:10.1016/0047-2727(88)90055-2