| Title: | And the Tax Winner Is… Endogenous Timing in the Commodity Taxation Race (2014) |
| Authors: | Hubert Kempf, Author ; Grégoire Rota-Graziosi, Author |
| In : | Annals of economics and statistics (N°113-114, June 2014) |
| Article on page: | pp. 67-79 |
| Languages: | English |
| Descriptors: |
[Eurovoc] FINANCE > taxation > tax [Eurovoc] FINANCE > taxation > tax on consumption > VAT [Eurovoc] FINANCE > taxation > tax on income [Eurovoc] TRADE > trade policy > market > commodities market > commodities exchange |
| Tags: | tax rates ; value added taxes ; first mover advantage ; income taxes ; Nash equilibrium ; economic competition ; property taxes ; excise taxes ; indirect taxes |
| Abstract: | We investigate the endogenous choice of leadership in commodity tax competition. We apply an endogenous timing game, where jurisdictions commit themselves to lead or to follow, to the Kanbur and Keen (1993) model. The Subgame Perfect Nash Equilibria (SPNE) correspond to the two Stackelberg situations, yielding to a coordination issue. Selecting an equilibrium by means of the risk-dominance criterion, we prove that the smaller country has to lead. When countries sufficiently differ in size, both countries set the same tax rate at the risk dominant equilibrium; when they are close in size, the larger country exploits its second-mover advantage by setting a lower tax rate than the small one. In either case, the "bigger-country-higher-tax-rate" rule does not hold anymore. |
| Doi : |
DOI : 10.15609/annaeconstat2009.113-114.67 
|
| Axe de recherche : | Financement du développement |
| Link for e-copy: | https://hal.archives-ouvertes.fr/hal-01306077 |
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