ca

IEB

Universitat de Barcelona logotipo
Working Paper
Federalisme Fiscal
Bruno De Borger, Wilfried Pauwels

2010/01: A Nash bargaining solution to models of tax and investment competition: tolls and investment in serial transport corridors

The purpose of this paper is to study toll and investment competition along a serial transport corridor competition allowing for partial cooperation between regional governments. Partial cooperation is modeled as a Nash bargaining problem with endogenous disagreement points. We show that the bargaining approach to partial cooperation implies lower tolls and higher quality and capacity investment than fully non- cooperative behavior. Moreover, under bargaining, strategic behavior at the investment stage induces regions to offer lower quality and invest less in capacity as compared to full cooperation. Finally, Nash bargaining partially resolves the problem of welfare losses due to toll and capacity competition pointed out in the recent literature.



Download PDF

Aquesta web utilitza cookies per a personalitzar la navegació i millorar els seus serveis. Si continua navegant, vostè accepta el seu ús de conformitat amb la nostra política de cookies. Veure més informació