The authors consider a two-period game of conflict between two factions, which have a desire for revenge. It is shown that, in contrast to conventional wisdom, the desire for revenge need not lead to escalation of the conflict. The subgame-perfect equilibrium is characterized by two effects: a...

This paper provides a rationale for subsidizing green (renewable) energy production. Within a multi-country model where energy is produced with mobile capital in green and dirty production, we investigate the countries' decentralized choice of emissions taxes and green energy subsidies. Without...

This paper contributes to the discussion on Separate Accounting versus Formula Apportionment in the corporate income taxation of multinational enterprises. The innovation is that we consider a general equilibrium tax competition model with an endogenous interest rate. In contrast to previous...