1201. Strategic inattention and tax competition for perfectly mobile capital
Invited abstract in session Selected Aspects of International Finance and OR 1, stream Selected Aspects of International Finance and OR.
Authors (first author is the speaker)
| 1. | Ajay Sharma
|
| Economics, IIM Indore |
Abstract
This paper analyzes tax competition for perfectly mobile capital when countries exhibit strategic inattention in their policy decisions. We introduce a novel theoretical framework where a subset of countries are strategically inattentive—responding only to aggregate market indicators rather than individual competitor actions—while others remain strategically attentive. Our model bridges the tax competition and behavioral economics literatures by incorporating monopolistic competition elements into fiscal federalism.
Keywords
- Game Theory
- Location Problems
- Economic Modeling
Status: accepted
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