Tax schemes in a class of differential games

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

This paper evaluates tax schemes in a class of differential games. The results indicate that there are many tax schemes that support efficient resource usage, but each may fail to implement the targeted resource because of the multiplicity of equilibria. Since all of the equilibria are subgame perfect, it is difficult to predict which specific one arises. Care must then be taken in using a tax scheme as a remedy for the "tragedy of the commons." The advantages of other policy instruments (including command-and-control regulation and a tradable permit system) are also discussed.

Original languageEnglish
Pages (from-to)155-174
Number of pages20
JournalEconomic Theory
Volume35
Issue number1
DOIs
Publication statusPublished - 2008 Apr

Fingerprint

Tax
Differential games
Resources
Policy instruments
Tradable permits
Multiplicity
Remedies
Tragedy of the commons

Keywords

  • Common property resource
  • Indeterminacy
  • Markov-perfect Nash equilibrium
  • Tax

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Tax schemes in a class of differential games. / Akao, Kenichi.

In: Economic Theory, Vol. 35, No. 1, 04.2008, p. 155-174.

Research output: Contribution to journalArticle

@article{25a171b0222e41fd9b24e03cbfa9d6da,
title = "Tax schemes in a class of differential games",
abstract = "This paper evaluates tax schemes in a class of differential games. The results indicate that there are many tax schemes that support efficient resource usage, but each may fail to implement the targeted resource because of the multiplicity of equilibria. Since all of the equilibria are subgame perfect, it is difficult to predict which specific one arises. Care must then be taken in using a tax scheme as a remedy for the {"}tragedy of the commons.{"} The advantages of other policy instruments (including command-and-control regulation and a tradable permit system) are also discussed.",
keywords = "Common property resource, Indeterminacy, Markov-perfect Nash equilibrium, Tax",
author = "Kenichi Akao",
year = "2008",
month = "4",
doi = "10.1007/s00199-007-0232-9",
language = "English",
volume = "35",
pages = "155--174",
journal = "Economic Theory",
issn = "0938-2259",
publisher = "Springer New York",
number = "1",

}

TY - JOUR

T1 - Tax schemes in a class of differential games

AU - Akao, Kenichi

PY - 2008/4

Y1 - 2008/4

N2 - This paper evaluates tax schemes in a class of differential games. The results indicate that there are many tax schemes that support efficient resource usage, but each may fail to implement the targeted resource because of the multiplicity of equilibria. Since all of the equilibria are subgame perfect, it is difficult to predict which specific one arises. Care must then be taken in using a tax scheme as a remedy for the "tragedy of the commons." The advantages of other policy instruments (including command-and-control regulation and a tradable permit system) are also discussed.

AB - This paper evaluates tax schemes in a class of differential games. The results indicate that there are many tax schemes that support efficient resource usage, but each may fail to implement the targeted resource because of the multiplicity of equilibria. Since all of the equilibria are subgame perfect, it is difficult to predict which specific one arises. Care must then be taken in using a tax scheme as a remedy for the "tragedy of the commons." The advantages of other policy instruments (including command-and-control regulation and a tradable permit system) are also discussed.

KW - Common property resource

KW - Indeterminacy

KW - Markov-perfect Nash equilibrium

KW - Tax

UR - http://www.scopus.com/inward/record.url?scp=38549121369&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=38549121369&partnerID=8YFLogxK

U2 - 10.1007/s00199-007-0232-9

DO - 10.1007/s00199-007-0232-9

M3 - Article

AN - SCOPUS:38549121369

VL - 35

SP - 155

EP - 174

JO - Economic Theory

JF - Economic Theory

SN - 0938-2259

IS - 1

ER -