Feedback Nash equilibria in optimal taxation problems

Mikhail Krastanov; Rossen Rozenov

Open Mathematics (2009)

  • Volume: 7, Issue: 4, page 757-774
  • ISSN: 2391-5455

Abstract

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A well-known result in public economics is that capital income should not be taxed in the long run. This result has been derived using necessary optimality conditions for an appropriate dynamic Stackelberg game. In this paper we consider three models of dynamic taxation in continuous time and suggest a method for calculating their feedback Nash equilibria based on a sufficient condition for optimality. We show that the optimal tax on capital income is generally different from zero.

How to cite

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Mikhail Krastanov, and Rossen Rozenov. "Feedback Nash equilibria in optimal taxation problems." Open Mathematics 7.4 (2009): 757-774. <http://eudml.org/doc/269277>.

@article{MikhailKrastanov2009,
abstract = {A well-known result in public economics is that capital income should not be taxed in the long run. This result has been derived using necessary optimality conditions for an appropriate dynamic Stackelberg game. In this paper we consider three models of dynamic taxation in continuous time and suggest a method for calculating their feedback Nash equilibria based on a sufficient condition for optimality. We show that the optimal tax on capital income is generally different from zero.},
author = {Mikhail Krastanov, Rossen Rozenov},
journal = {Open Mathematics},
keywords = {Optimal dynamic taxation; Differential games; optimal dynamic taxation; differential games},
language = {eng},
number = {4},
pages = {757-774},
title = {Feedback Nash equilibria in optimal taxation problems},
url = {http://eudml.org/doc/269277},
volume = {7},
year = {2009},
}

TY - JOUR
AU - Mikhail Krastanov
AU - Rossen Rozenov
TI - Feedback Nash equilibria in optimal taxation problems
JO - Open Mathematics
PY - 2009
VL - 7
IS - 4
SP - 757
EP - 774
AB - A well-known result in public economics is that capital income should not be taxed in the long run. This result has been derived using necessary optimality conditions for an appropriate dynamic Stackelberg game. In this paper we consider three models of dynamic taxation in continuous time and suggest a method for calculating their feedback Nash equilibria based on a sufficient condition for optimality. We show that the optimal tax on capital income is generally different from zero.
LA - eng
KW - Optimal dynamic taxation; Differential games; optimal dynamic taxation; differential games
UR - http://eudml.org/doc/269277
ER -

References

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  8. [8] Krastanov M., Rozenov R., On Chamley’s problem of optimal taxation, Proceedings of the 37th Spring Conference of the Union of Bulgarian Mathematicians, 2008, 216–220 
  9. [9] Lansing K., Optimal redistributive capital taxation in a neoclassical growth model, Journal of Public Economics, 1999, 73, 423–453 http://dx.doi.org/10.1016/S0047-2727(99)00016-X[Crossref] 
  10. [10] Rubio S.J., On coincidence of feedback Nash equilibria and Stackelberg equilibria in economic applications of differential games, Journal of Optimization Theory and Applications, 2006, 128(1), 203–221 http://dx.doi.org/10.1007/s10957-005-7565-y[Crossref] Zbl1118.91023
  11. [11] Seierstad A., Sydsaeter K., Sufficient conditions in optimal control theory, International Economic Review, 1977, 18(2), 367–391 http://dx.doi.org/10.2307/2525753[Crossref] Zbl0392.49010
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