---
_id: '2671707'
abstract:
- lang: eng
text: This paper analyzes the impact of foreign investments on a small country's
economy in the context of international competition. To that end, we model tax
and infrastructure competition within a differential game framework between two
unequally sized countries. The model accounts for the widely recognized characteristic
that small states are more flexible in their political decision making than larger
countries. However, we also acknowledge that small size is associated with limited
institutional capacity in the provision of public goods. The model shows that
the long-term outcome of international competition crucially depends on the degree
of capital mobility. In particular, we show that flexibility mitigates against
- but does not eliminate - the likelihood of collapse in a small economy. Finally,
we note that the beneficial effect of flexibility in a small state increases with
its inefficiency in providing public infrastructure and with the degree of international
openness.
accept: '1'
author:
- first_name: Yutao
full_name: Han, Yutao
last_name: Han
- first_name: Patrice
full_name: Pieretti, Patrice
last_name: Pieretti
- first_name: Skerdilajda
full_name: Zanaj, Skerdilajda
last_name: Zanaj
- first_name: Benteng
full_name: Zou, Benteng
last_name: Zou
citation:
ama: 'Han Y, Pieretti P, Zanaj S, Zou B. *Asymmetric competition among Nation
States: a differential game approach*. Working Papers. Institute of Mathematical
Economics. Vol 460. Bielefeld: Center for Mathematical Economics; 2012.'
angewandte-chemie: 'Y. Han, P. Pieretti, S. Zanaj, and B. Zou, *Asymmetric
competition among Nation States: a differential game approach*, Center For
Mathematical Economics, Bielefeld, **2012**.'
apa: 'Han, Y., Pieretti, P., Zanaj, S., & Zou, B. (2012). *Asymmetric competition
among Nation States: a differential game approach* (Working Papers. Institute
of Mathematical Economics, 460). Bielefeld: Center for Mathematical Economics.'
apa_indent: 'Han,
Y., Pieretti, P., Zanaj, S., & Zou, B. (2012). *Asymmetric competition
among Nation States: a differential game approach* (Working Papers. Institute
of Mathematical Economics, 460). Bielefeld: Center for Mathematical Economics.

'
bio1: 'Han Y, Pieretti P, Zanaj S, Zou B (2012)

*Asymmetric competition
among Nation States: a differential game approach*. Working Papers. Institute
of Mathematical Economics; 460.

Bielefeld: Center for Mathematical Economics.'
chicago: 'Han,
Yutao, Pieretti, Patrice, Zanaj, Skerdilajda, and Zou, Benteng. 2012. *Asymmetric
competition among Nation States: a differential game approach*. Vol. 460.
Working Papers. Institute of Mathematical Economics. Bielefeld: Center for Mathematical
Economics.

'
default: 'Han Y, Pieretti P, Zanaj S, Zou B (2012) Working Papers. Institute of
Mathematical Economics; 460.

Bielefeld: Center for Mathematical Economics.'
dgps: 'Han,
Y., Pieretti, P., Zanaj, S. & Zou, B. (2012). *Asymmetric competition among
Nation States: a differential game approach* (Working Papers. Institute of
Mathematical Economics). Bielefeld: Center for Mathematical Economics.

'
frontiers: 'Han, Y., Pieretti, P., Zanaj, S., and Zou, B. (2012). Asymmetric competition
among Nation States: a differential game approach. *Working Papers. Institute
of Mathematical Economics*, 460, Bielefeld: Center for Mathematical Economics.'
harvard1: 'Han, Y., et al., 2012. *Asymmetric competition among Nation States:
a differential game approach*, Working Papers. Institute of Mathematical Economics,
no.460, Bielefeld: Center for Mathematical Economics.'
ieee: ' Y. Han, et al., *Asymmetric competition among Nation States: a differential
game approach*, Working Papers. Institute of Mathematical Economics, vol.
460, Bielefeld: Center for Mathematical Economics, 2012.'
lncs: ' Han, Y., Pieretti, P., Zanaj, S., Zou, B.: Asymmetric competition among
Nation States: a differential game approach. Working Papers. Institute of Mathematical
Economics, 460. Center for Mathematical Economics, Bielefeld (2012).'
mla: 'Han, Yutao, Pieretti, Patrice, Zanaj, Skerdilajda, and Zou, Benteng. *Asymmetric
competition among Nation States: a differential game approach*. Bielefeld:
Center for Mathematical Economics, 2012. Working Papers. Institute of Mathematical
Economics. 460.'
wels: 'Han, Y.; Pieretti, P.; Zanaj, S.; Zou, B. (2012): Asymmetric competition
among Nation States: a differential game approach. Bielefeld: Center for Mathematical
Economics.'
date_created: 2014-04-15T12:55:53Z
date_updated: 2018-08-27T12:52:22Z
ddc:
- '330'
department:
- _id: '10053'
file:
- access_level: open_access
content_type: application/pdf
date_created: 1970-01-01T00:00:00Z
date_updated: 2016-02-15T14:39:58Z
file_id: '2671708'
file_name: IMW_working_paper_460.pdf
open_access: '1'
relation: main_file
file_date_updated: 2016-02-15T14:39:58Z
intvolume: ' 460'
jel:
- H25
- H73
- O30
- Q43
keyword:
- Tax/Infrastructure competition
- Open-loop/Markovian strategies
- Differential games
language:
- iso: eng
locked: '1'
oa: 1
page: '23'
place: Bielefeld
publication_identifier:
issn:
- 0931-6558
publication_status: published
publisher: Center for Mathematical Economics
related_material:
link:
- description: Working Paper als Zeitschriftenartikel verÃ¶ffentlicht in "Journal
of Public Economics", 2014
relation: new_edition
url: https://doi.org/10.1016/j.jpubeco.2014.07.008
series_title: Working Papers. Institute of Mathematical Economics
status: public
title: 'Asymmetric competition among Nation States: a differential game approach'
type: working_paper
urn: urn:nbn:de:0070-pub-26717074
user_id: '89573'
volume: 460
year: '2012'
...