Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82048
Authors: 
Eggert, Wolfgang
Kolmar, Martin
Year of Publication: 
2002
Series/Report no.: 
EPRU Working Paper Series 2002-01
Abstract: 
We analyze tax competition between large and asymmetric countries and derive conditions under which countries assist foreign authorities in collecting tax revenues via information exchange. It turns out that voluntary exchange of information is a Nash equilibrium between asymmetric countries, resulting in an efficient use of taxes by governments. However, this equilibrium is not unique and the structure of the resulting equilibrium-selection problem depends on the relative size of countries. Our model gives an explanation for the empirical observation that especially smaller countries are reluctant to co-ordinate on the full-information equilibrium, whereas countries of similar size kan solve the information problem.
Document Type: 
Working Paper

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