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dc.contributor.authorGries, Thomasen_US
dc.contributor.authorPrior, Ulrichen_US
dc.contributor.authorSureth, Carenen_US
dc.date.accessioned2007-11-08en_US
dc.date.accessioned2009-08-06T11:06:20Z-
dc.date.available2009-08-06T11:06:20Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/27057-
dc.description.abstractUnder uncertainty and irreversibility, real option-based models are widely accepted for assessing investment projects. So far the existing post-tax analyses do not provide a general analytical description of investor reactions towards profit tax rate changes. This paper sets out to fill part of the void. We implement a simple tax system and focus on risky capital market investment and an option to wait. Taxes affect risk-free and risky capital market investment asymmetrically and hence cause distortions. We analytically identify a set of neutral tax rates (tax regimes) that preserve the critical post-tax investment threshold in case of tax rate changes as well as general normal and paradoxical settings. Unlike for other tax paradoxa neither depreciation rules nor loss offset restrictions are responsible for the observed paradoxical reaction. Identifying normal and paradoxical tax regimes can be regarded as a first step to a generalized description of tax effects under uncertainty, both for individual project evaluation as well as for understanding tax effects on an aggregate level.en_US
dc.language.isoengen_US
dc.publisherArbeitskreis Quantitative Steuerlehre (arqus) Berlinde
dc.relation.ispartofseriesArqus-Diskussionsbeiträge zur quantitativen Steuerlehre 26de
dc.subject.jelH25en_US
dc.subject.jelH21en_US
dc.subject.ddc330en_US
dc.subject.keywordinvestment decisionen_US
dc.subject.keywordreal optionsen_US
dc.subject.keywordtax paradoxen_US
dc.subject.keyworduncertaintyen_US
dc.subject.stwBetriebliche Investitionspolitikde
dc.subject.stwRealoptionde
dc.subject.stwSteuerde
dc.subject.stwEntscheidung bei Unsicherheitde
dc.subject.stwTheoriede
dc.titleTaxation of risky investment and paradoxical investor behavioren_US
dc.typeWorking Paperen_US
dc.identifier.ppn548818975en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:arqudp:26-
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