Regulation of multinational firms with two active governments: A common agency approach

• 成果类型: Article
• 署名作者: Bond, EW; Gresik, TA
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/0047-2727(94)01493-0
• 发表日期: 1996
• 页码: 33-53
• 关键词: multinational regulation; common agency; intergovernment competition

摘要

When a government agency imposes cost-based taxes/regulations on a multinational with private cost information, it may initiate countervailing regulations by another of the governments with which the multinational interacts. We analyze the problem of optimal regulation of a multinational under incomplete cost information (via trade taxes) by multiple governments as a problem of common agency with adverse selection. By focusing on the game played by the competing governments we characterize the equilibrium trade taxes and show that the non-cooperative behavior of the governments not only reduces aggregate national welfare but also reduces firm profits.