the effect of tax treaties on multinational firms new evidence from microdata this paper uses affiliate level data from swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales in line with previous results we find little evidence for an effect of treaties on the level of total sales we do however find that a tax treaty increases the probability of investment by a firm in a given country in addition we find that a treaty reduces exports to the parent but increases imports of intermediate inputs from the parent this is consistent with treaties increasing the effective host tax this suggests that tax treaties impact the behavior of multinationals along some dimensions but not along others

how investible is bitcoin analyzing the liquidity and transaction costs of bitcoin markets abstract we examine the investibility of bitcoin by exploring the trading dynamics and market microstructure of bitcoin on three us cryptocurrency exchanges using high frequency intraday data of individual trades and quotes although all exchanges offer continuous trading we find that the highest trading activity highest volatility and lowest spreads coincide with us market trading hours suggesting that most trades are non algorithmic and executed by retail investors we further find that average quoted and effective spreads for bitcoin are lower than spreads on major equity exchanges implying that bitcoin is highly investible for retail size transactions

a theory of voting equilibria a voting equilibrium arises when the voters in an electorate acting in accordance with both their preferences for the candidates and their perceptions of the relative chances of various pairs of candidates being in contention for victory generate an election result that justifies their perceptions voting equilibria always exist and the set of equilibria can vary substantially with the choice of voting system we compare equilibria under the plurality rule approval voting and the borda system we consider a candidate positioning game and find that the plurality rule imposes little restriction on the position of the winning candidate in three candidate races while approval voting leads to a winner positioned at the median of the voter distribution we contrast campaign activities intended to influence voter preferences with activities meant to influence only perceptions of candidate viability

speculative bubbles in bitcoin markets an empirical investigation into the fundamental value of bitcoin amid its rapidly increasing usage and immense public interest the subject of bitcoin has raised profound economic and societal issues in this paper we undertake economic and econometric modelling of bitcoin prices as with many asset classes we show that bitcoin exhibits speculative bubbles further we find empirical evidence that the fundamental price of bitcoin is zero

asymmetric equilibria in spatial competition under weakly concave scoring rules abstract the hotelling downs model of spatial competition is used to investigate the strategic position taking behavior of firms or political parties under scoring rules previous studies of non convergent nash equilibria equilibria in which divergent positions are chosen found that they often do not exist and when they do they are fairly symmetric in particular this is true for convex scoring rules cahan and slinko 2017 here we investigate non convergent equilibria for the broad class of weakly concave scoring rules surprisingly we find that only asymmetric equilibria can exist and we present several examples

volatility estimation for bitcoin a comparison of garch models we explore the optimal conditional heteroskedasticity model with regards to goodness of fit to bitcoin price data it is found that the best model is the ar cgarch model highlighting the significance of including both a short run and a long run component of the conditional variance

optimal trade policy under oligopoly a calibrated model of the europe japan rivalry in the eec car market this paper was originally presented at the cefi conference on imperfect competition and international trade aix en provence france june 18 19 1987 we wish to thank avinash dixit who gave the initial impetus to this research we are also grateful to alexis jacquemin and paul krugman for valuable discussion and comments we thank also the french commissariat au plan for financial support and the chambre syndicale des constructeurs automobiles csca for gracious assistance

strategic behaviour and the rules for international taxation of capital this paper examines the welfare of a capital exporting or source country and a capital importing or host country under tax credit and tax deduction systems for the international taxation of capital because the two tax systems may create quite different strategic incentives for the countries the authors compare the equilibria in the tax setting game played by the two countries under each system they find that the tax credits system introduces an antitrade bias into the equilibrium contrary to initial impressions and that both capital exporting and capital importing countries will prefer the tax deductions scheme to tax credits copyright 1989 by royal economic society

effectiveness of electoral systems for reducing government corruption a game theoretic analysis abstract a theoretical model is developed for predicting the relative effectiveness of different electoral systems for reducing government corruption we consider voting games in which parties with known corruption levels and known positions on a major policy question compete for legislative seats we find that approval voting and proportional representation are fully effective in the sense that all equilibria exclude corrupt parties from legislative seats plurality voting is partly effective in the sense that there always exist some equilibria that exclude corrupt parties borda voting is ineffective because for some political situations no equilibria can guarantee the exclusion of corrupt parties journal of economic literature classification number d72

price clustering in bitcoin investor and media attention in bitcoin has increased substantially in recently years reflected by the incredible surge in news articles and considerable rise in the price of bitcoin given the increased attention there little is known about the behaviour of bitcoin prices and therefore we add to the literature by studying price clustering we find significant evidence of clustering at round numbers with over 10 of prices ending with 00 decimals compared to other variations but there is no significant pattern of returns after the round number we also support the negotiation hypothesis of harris 1991 by showing that price and volume have a significant positive relationship with price clustering at whole numbers

why vote for losers voting theory generally concludes that in first past the post elections all votes should go to effective candidates duverger s law and parties should adopt a similar platform median voter theorem however such predictions are not always met in practice we show why divergence and vote dispersion is a natural outcome when a parties are opportunistic b there is uncertainty on the position of the median voter and c elections are repeated voting for losers increases the informational content of elections and may induce mainstream parties to relocate towards extremists as a result to maximize their probability of being elected they do not adopt median

elections coalitions and legislative outcomes predictions of electoral behavior in a multiparty setting should be a function of the voters beliefs about how parties will perform following an election similarly party behavior in a legislature should be a function of electoral promises and rewards we develop a multistage game theoretic model of three party competition under proportional representation the final policy outcome of the game is generated by a noncooperative bargaining game between the parties in the elected legislature this game is essentially defined by the vote shares each party receives in the general election and the parties electoral policy positions at the electoral stage parties and voters are strategic in that they take account of the legislative implications of any electoral outcome we solve for equilibrium electoral positions by the parties and final policy outcomes

elections governments and parliaments in proportional representation systems this paper presents a theory of parliamentary systems with a proportional representation electoral system a formateur selected based on party representation in parliament and parties that cannot commit to the policies they will implement once in government government formation involves efficient proto coalition bargaining and elections yield unique strong nash equilibrium outcomes depending on the status quo minimal majority surplus or consensus governments can form if parties and voters are myopic and the status quo is subject to shocks consensus governments and centrist policies occur only in a crisis otherwise governments are minimal winning and policies reflect only the preferences of the government parties

taxing foreign profits with international mergers and acquisitions a large part of border crossing investment takes the form of international mergers and acquisitions in this article we ask how optimal repatriation tax systems look like in a world where investment involves a change of ownership instead of a reallocation of real capital we find that the standard results of international taxation do not carry over to the case of international mergers and acquisitions the deduction system is no longer optimal from a national perspective and the foreign tax credit system fails to ensure global optimality the tax exemption system is optimal if ownership advantage is a public good within the multinational firm however the cross border cash flow tax system dominates the exemption system in terms of optimality properties

foreign aid and market liberalizing reform market oriented economic policies reflected in limited economic activity by government protection of private property rights sound monetary policy outward orientation regarding trade and efficient tax and regulatory policy have been strongly linked to faster rates of economic growth foreign aid is often provided in the belief that it encourages liberalizing reforms in these areas this paper analyzes the impact of aid on market liberalizing policy reform correcting for the possible endogeneity of aid results indicate that higher aid slowed reform over the 1980 2000 period as measured by a broad index of policies disaggregating policy into five areas aid is significantly linked to slower reform in some policy areas but not in others disaggregating by decade aid s adverse impact on policy reform is much more pronounced for the 1980s than for the 1990s

the provision of public goods under alternative electoral incentives politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork barrel spending we compare a winner take all system where all the spoils go to the winner to a proportional system where the spoils of office are split among candidates proportionally to their share of the vote in a winner take all system the public good is provided less often than in a proportional system when the public good is particularly desirable we then consider the electoral college system and show that it is particularly subject to this inefficiency

foreign direct investment with unemployment and endogenous taxes and tariffs it is well known that high tariffs can induce foreign direct investment or tariff jumping this paper analyzes tariff jumping in the context of a host government which can set specific tariffs and taxes subject to the credibility constraint that the chosen levels be optimal once capital is irreversibly in place the foreign multinational is assumed to choose its location and level of investment strategically taking into account the induced tax and tariff levels in the presence of unemployment the optimal tariff exceeds the optimal tax for any given level of capital investment leading to foreign direct investment

incentives to cultivate favored minorities under alternative electoral systems a simple model is used to compare under different electoral systems the incentives for candidates to create inequalities among otherwise homogeneous voters by making campaign promises that favor small groups rather than appealing equally to all voters in this game model each candidate generates offers for voters independently out of a distribution that is chosen by the candidate subject only to the constraints that offers must be nonnegative and have mean 1 symmetric equilibria with sincere voting are analyzed for two candidate elections and for multicandidate elections under rank scoring rules approval voting and single transferable vote voting rules that can guarantee representation for minorities in multiseat elections generate in this model the most severely unequal campaign promises

divided majority and information aggregation theory and experiment this paper studies theoretically and experimentally the properties of plurality and approval voting when a majority gets divided by information imperfections the majority faces two challenges aggregating information to select the best majority candidate and coordinating to defeat the minority candidate under plurality the majority cannot achieve both goals at once under approval voting it can welfare is strictly higher because some voters approve of both majority alternatives in the laboratory we find i strong evidence of strategic voting and ii superiority of approval voting over plurality finally subject behavior suggests the need to study equilibria in asymmetric strategies

corporate tax systems multinational enterprises and economic integration abstract multinational firms are known to shift profits and countries are known to compete over shifty profits two major principles for corporate taxation are separate accounting sa and formula apportionment fa these two principles have very different qualities when it comes to preventing profit shifting and preserving national tax autonomy most oecd countries use sa in this paper we show that a reduction in trade barriers lowers equilibrium corporate taxes under sa but leads to higher taxes under fa from a welfare point of view the choice of tax principle is shown to depend on the degree of economic integration

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

theoretical comparisons of electoral systems abstract elements of an economic theory of political institutions are introduced a variety of electoral systems are reviewed cox s threshold is shown to measure incentives for diversity and specialization of candidates positions when the number of serious candidates is given duverger s law and its generalizations are discussed to predict the number of serious candidates duverger s law is interpreted as a statement about electoral barriers to entry and this idea is linked to the question of the effectiveness of democratic competition as a deterrent to political corruption the impact of post electoral bargaining on party structure in presidential and parliamentary systems is discussed

electoral thresholds as coordination devices this paper studies one person one vote parliamentary elections where voters care both about the winner of elections and about the composition of the parliament parties enter the parliament if and only if their vote share exceeds some predetermined threshold we show a that there generically exist equilibria in which all parties get a non degenerate vote share and perhaps more importantly b that the size of the electoral threshold acts as a coordination device which crucially affects the win prospects of the condorcet winner party in particular we argue that the win prospects of the condorcet winner party are decreasing in the size of the entry threshold

political equilibrium and the provision of public goods this paper treats interest groups peoplein their role as consumers of a public goodand people in their role as taxpayers asthe unit of account for representativevoting each group is allowed to make aneffort to support its preferred candidateand at the margin the effort benefitratio is the political price the group iswilling to pay to secure an additionaldollar of benefits

taxes tariffs and the global corporation in this paper we develop some simple models of optimal tax and tariff policy in the presence of global corporations that operate in an imperfectly competitive environment the models emphasize two important differences in the practical application of tax and tariff policy tax but not tariff policy can apply to offshore output and tariff but not tax policy can be industryspecific recognizing that multinationals production decisions are endogenous to the tax and tariff policies they face we investigate how a government should tax or subsidize domestically owned firms and how government should set trade policy

the silver lining of red tape abstract an increasing number of international agreements require non discrimination from their participants i e the government of one country cannot treat foreign firms differently from domestic firms this is at odds with a government s desire to benefit its own citizens rather than foreign citizens i show that the use of red tape a wasteful application process can achieve de facto discrimination key to this result is firm heterogeneity since although the red tape cost is the same across firms only those sufficiently benefiting from an incentive program will find it worth the cost of applying if the benefits of targeting subsidies outweigh the burden of red tape red tape will be used

the taxing task of taxing transnationals financial and real investment flexibility tax competition and superior economic information by transnationals both create a rationale for corporate income taxation and limit the effectiveness of such taxation while these factors have led to a variety of transnational tax policies such as deferral double taxation apportionment and trade rules very few of these institutional features have been integrated into tax competition and agency models in this paper i show how the integration of investment flexibility tax competition and agency issues is crucial to our understanding of corporate tax policies

analysis of democratic institutions structure conduct and performance t s ahe structure of a democratic political system consists of the offices that politicians may seek the constitutional powers associated with these offices and the procedures by which candidates are elected to these offices these structures together form a complex incentive system for politicians determining what kinds of political decisions and strategies will be rewarded thus the constitutional structure of a democracy may influence the conduct of its politicians and the performance of its government in this way political theory confronts a set of questions that have much in common with the classic economic questions of structure conduct and performance in industrial organization this paper develops this economic perspective on political theory as a guide to some problems and directions of current research economic and political interpretations of a classic model

art market inefficiency art is often used as an investment vehicle given the importance of market efficiency in finance we use a large auction based index to test whether the art market is weakly efficient evidence reveals that returns on artworks exhibit high positive auto correlation we attribute this result to price truncation resulting from unobservable reserve prices in auctions we conclude that the art market is not efficient mainly because price formation is opaque to outsiders who lack information on unsold artworks

decentralization and transfer pricing under oligopoly this paper presents a simple model of a partially decentralized multinational firm mnf in competition with a rival firm it is shown that transfer pricing can be used as a rent shifting device by the mnf to compete with the rival this arises because the mnf headquarters uses the transfer price to manage different subsidiaries the specific value of the transfer price chosen by the mnf depends on whether the rival firm produces the intermediate good the final good or both and whether the rival is integrated or not in particular both decentralization and competition with a fully integrated rival result in lower transfer prices

the inefficiency of bitcoin bitcoin has received much attention in the media and by investors in recent years although there remains scepticism and a lack of understanding of this cryptocurrency we add to the literature on bitcoin by studying the market efficiency of bitcoin through a battery of robust tests evidence reveals that returns are significantly inefficient over our full sample but when we split our sample into two subsample periods we find that some tests indicate that bitcoin is efficient in the latter period therefore we conclude that bitcoin in an inefficient market but may be in the process of moving towards an efficient market

challenger entry and voter learning we develop a model of strategic interaction between voters and potential electoral challengers to sitting incumbents in which the very fact of a costly challenge conveys relevant information to voters given incumbent failure in office challenger entry is more likely but the threat of entry by inferior challengers creates an incentive for citizens to become more politically informed at the same time challenges to incumbents who perform well can neutralize a voter s positive assessment of incumbent qualifications how a voter becomes politically informed can in turn deter challengers of different levels of competence from running depending on the electoral environment the model permits us to sharpen our understanding of retrospective voting the incumbency advantage and the relationship between electoral competition and voter welfare while pointing to new interpretations of and future avenues for empirical research on elections

does twitter predict bitcoin this paper adds to the growing literature of bitcoin by examining the link between investor attention and bitcoin returns trading volume and realized volatility unlike previous studies we employ the number of tweets from twitter as a measure of attention rather than google trends as we argue this is a better measure of attention from more informed investors we find that the number of tweets is a significant driver of next day trading volume and realized volatility which is supported by linear and nonlinear granger causality tests

can capital income taxes survive in open economies optimal tax theory forecasts that small open economies should not tax capital income yet countries do tax capital income why the inconsistency this paper shows that use of the double taxation convention whereby governments credit taxes paid abroad against domestic taxes helps explain this inconsistency in particular capital income will be taxed if a dominant capital exporter acts as a stackelberg leader when setting its tax policy due to the convention other countries will then tax capital imports making it attractive for the dominant capital exporter to tax capital income without a dominant capital exporter however the model still forecasts no capital income taxes can taxation of capital income survive the increasing integration of world capital markets a number of recent papers suggest not diamond and mirrlees 1971 for example showed that a small open economy would not choose to tax the income generated by the physical capital located within the country this is because production would occur efficiently under an optimal tax system which requires that domestic investments earn the rate of return available on the world capital market in principle a country might still attempt to tax income earned on the savings of its residents however in practice income from savings invested outside the country is virtually impossible for a government to monitor individuals therefore can evade tax on such savings with very little risk as razin and sadka 1989 show such capital flight in theory eliminates any possibility of a tax on savings investors will simply transfer their funds abroad to avoid taxation yet virtually all countries do in fact tax the capital income earned by corporations and individuals located within their borders how can the theoretical forecast of no capital income taxation be reconciled with this simple observation it is difficult to use existing models with any confidence to analyze the implications of changes in capital income tax rates if these same models forecast that countries should never tax capital income

announcement effects in the cryptocurrency market cryptocurrencies have gained popularity as new economic investment assets globally in recent years this study examines market reactions to major news events associated with cryptocurrencies abnor

strategic voting equilibria under the single nontransferable vote previous investigations of strategic voting equilibria in mass electorates have looked only at single member districts i shall investigate such equilibria in multimember districts operating under the single nontransferable vote system what appear to be the most natural equilibria conform to the m 1 rule according to which strategic voting in m seat districts produces exactly m 1 vote getting candidates in equilibrium any others having their support totally undercut this result provides the beginnings of a formal underpinning for reed s recent extension of duverger s law to the japanese case the model also generates specific and empirically testable hypotheses concerning the exceptions to the m 1 rule that one ought to expect in equilibrium i test these hypotheses with japanese data finally the model also reveals a type of strategic voting that is specific to multimember districts i use japanese data again to explore the empirical importance of this kind of strategic voting

electoral institutions hometowns and favored minorities evidence from japanese electoral reforms this article presents evidence that electoral institutions affect the geographic distribution of both candidate electoral support and government resources the author exploits two electoral reforms in japan to identify the effect of institutional incentives 1 the 1994 electoral reform from a multimember single nontransferable vote sntv system to a mixed member majoritarian mmm system with a single member district smd component and a proportional representation component and 2 the 1925 electoral reform from a predominantly smd system to a multimember sntv system using several new data sets the two main findings of this article are that 1 japanese representatives competing in multimember sntv districts had more geographically concentrated electoral support than those competing in smds and that 2 intergovernmental transfers appear to be more concentrated around liberal democratic party ldp incumbents home offices under the multimember sntv system than under the mmm system the findings in this article highlight the connection between institutions and geographic patterns of representation

socially optimal districting a theoretical and empirical exploration this paper investigates the problem of optimal districting in the context of a simple model of legislative elections in the model districting matters because it determines the seat vote curve which describes the relationship between seats and votes the paperrst characterizes the optimal seat vote curve and shows that under a weak condition there exist districtings that generate this ideal relationship the paper then develops an empirical methodology for computing seat vote curves and measuring the welfare gains from implementing optimal districting this is applied to analyze the districting plans used to elect u s state legislators during the 1990s

bitcoin returns and transaction activity abstract this paper examines the empirical linkages between bitcoin returns and transaction activity extant literature shows bitcoin prices may be detached from economic fundamentals the question that remains however is whether its price movements are linked with its transaction activity a critical element of its growing market microstructure using number of bitcoin transactions and unique addresses respectively to proxy for transaction activity it is shown that a one standard deviation shock to transaction activity leads to just over a 0 30 gain in returns on the third day following the shock by the sixth day there is a reversal in price behavior and any such gains are expunged when comparing the bidirectional linkages between returns and transaction activity it is shown here that the contribution of return shocks to transaction activity is quantitatively larger in magnitude

constitutional structures for a strong democracy considerations on the government of pakistan summary i consider structural reforms to democracy in pakistan using ideas from the analysis of oligopolistic competition and game theory successful democracy requires strong flexible political parties and high quality responsible leaders parliamentary responsibility for government helps develop strong parties national parties should be able to nominate candidates in all elections at all levels for flexibility members of the national assembly should be free to form new parties with federalism provincial and local democracy also reduce political entry barriers approval voting open list proportional representation can strengthen democratic leadership in all communities runoff elections would allow more flexible party competition in single seat districts

the oecd model tax treaty tax competition and two way capital flows model tax treaties do not require tax rate coordination but do require that either credits or exemptions be applied to repatriated earnings this contradicts recent models with a single capital exporter where deductions are most efficient i incorporate the fact that capital flows are typically bilateral with symmetric countries credits by both is the unique and efficient treaty equilibrium this equilibrium weakly dominates the nontreaty equilibrium with asymmetric countries the treaty need not offer improvements without tax harmonization with harmonization it is always possible to reach efficient capital allocations while increasing both countries welfares only if neither uses deductions

return volatility and shock spillovers of bitcoin with energy and technology companies we employ an asymmetric multivariate var garch model to study spillover effects between bitcoin and energy and technology companies we find unilateral return and volatility spillovers and bidirectional shock influences and demonstrate portfolio management implications of dynamic conditional correlations

centripetal and centrifugal incentives in electoral systems this paper investigates how electoral laws affect the position taking incentives of parties and candidates it seeks to extend the finding presented in the classical median voter theorem to a wide class of electoral systems or to show the limits of such extension the factors examined are the district magnitude the electoral formula the number of votes each voter is allowed to cast whether voters can cumulate their votes and whether voters can partially abstain i suggest a crude division of electoral systems into those producing predominantly centripetal incentives and those producing predominantly centrifugal incentives among the factors found to produce centripetal incentives at least in noncumulative systems are the following increases in the number of votes per voter outlawry of partial abstention and decreases in the district magnitude in systems allowing the cumulation of votes matters are a bit different

optimal tax and tariff policies with tax credits abstract this paper examines the optimal tax and tariff policies for a small open economy when mobile capital receives a tax credit for taxes paid to the host country for a capital importing country a tax on capital equal to the source country tax rate to capture tax revenue combined with a subsidy to encourage capital imports is the optimal policy results are also derived for cases in which only one of the instruments can be varied for a capital exporting country that cannot reduce its capital tax rate a subsidy to the sector using exported capital is desirable

political selection under alternative electoral rules we study the patterns of political selection in majoritarian versus proportional systems political parties face a trade off in choosing the mix of high and low quality candidates high quality candidates are valuable to voters and thus help to win elections but they crowd out loyal candidates who are most preferred by the parties under proportional representation politicians selection depends on the share of swing voters in the entire electorate in majoritarian elections it depends also on the distribution of competitive versus safe single member districts we show that a majoritarian system with only a few competitive districts is less capable of selecting good politicians than a proportional system as the share of competitive districts increases the majoritarian system becomes more efficient than the proportional system however for a large enough share of competitive districts a non monotonic relation arises the marginal positive effect of adding high quality politicians on the probability of winning the election is reduced and highly competitive majoritarian systems become less efficient than proportional ones in selecting good politicians

stability in electoral competition a case for multiple votes abstract it is well known that the hotelling downs model generically fails to admit an equilibrium when voting takes place under the plurality rule osborne 1993 this paper studies the hotelling downs model considering that each voter is allowed to vote for up to k candidates and demonstrates that an equilibrium exists for a non degenerate class of distributions of voters ideal policies which includes all log concave distributions if and only if k 2 that is the plurality rule k 1 is shown to be the unique k vote rule which generically precludes stability in electoral competition regarding the features of k vote rules equilibria first we show that there is no convergent equilibrium and then we fully characterize all divergent equilibria we study comprehensively the simplest kind of divergent equilibria two location ones and we argue that apart from existing for quite a general class of distributions when k 2 they have further attractive properties among others they are robust to free entry and to candidates being uncertain about voters preferences

bargaining with commitment choice of techniques and direct foreign investment abstract once a firm has installed a plant in a host country the country will have an incentive to reopen negotiations concerning tax rates this paper examines the incentives for the country to commit to not reopening negotiations a commitment deters the firm from inefficiently reducing the capital intensity of its investment but apparently surrenders tax revenues by not exploiting the country s post entry bargaining power we show that commitment will be optimal as long as the tax system does not place too distortionary a burden on capital and the country has access to capital markets

on the theory of strategic voting many analyses of plurality rule elections predict the complete coor dination of strategic voting and hence support for only two candidates here i suggest that stable multi candidate support will arise in equilibrium a group of voters must partially coordinate behind one of two challenging candidates in order to dislodge a disliked incumbent in a departure from existing models the popular support for each challenger is uncertain this support must be inferred from the private observation of informative signals such as the social communication of pref erences throughout the electorate or the imperfect observation of opinion polls the uniquely stable voting equilibrium entails only limited strategic voting and hence incomplete coordination this is due to the surprising presence of negative feed back an increase in the degree of strategic voting by others reduces the incentives for an individual to vote strategically the incentive to vote strategically is lower in relatively marginal elections after controlling for the distance from contention of a trailing preferred challenger a calibration of the model applied to the uk general election of 1997 is consistent with the impact of strategic voting and the reported accuracy of voters understanding of the electoral situation it suggests that nearly 50 seats may have been lost by the conservative party due to strategic voting 1 plurality rule elections and strategic voting 1 1 strategic voting and duverger s law plurality rule elections where the winner is the candidate who receives the largest number of votes are vulnerable to strategic voting a voter might well switch away from her preferred candidate and toward a perceived leader in the hope of exerting a greater influence over the outcome of the election this phenomenon has long been the focus of both economic and political scientific study in an influential essay riker 1982b cited droop s 1871 eloquent exposition of the strategic voting problem 1 i oer my grateful thanks to the many friends colleagues seminar participants referees and editors who have oered insightful comments during the long gestation of this paper its antecedents and companion work special thanks go to steve fisher whose empirical analysis of strategic voting raised many of the questions that i seek to answer in this paper and to chris wallace this particular paper brings together much of the analysis previously circulated in the papers a new theory of strategic voting strategic voting under the qualified majority rule and idiosyncrasy information and the impact of strategic voting

bitcoin s energy consumption is it the achilles heel to miner s revenue abstract in this paper we add a new dimension to the cryptocurrency literature by examining the relationship between bitcoin s energy consumption and miner s revenue by resorting to quantile and markov regime switching regression we report a negative association between these variables further the negative impact is strongly significant when the miner s revenues are low and volatile thus the higher energy consumption in the wake of escalating global energy costs amid bearish market sentiments impedes the miners to break even hence it would not be viable to sustain the business unless cheap energy sources and efficient mining hardware are relied upon

foreign direct investment under oligopoly profit shifting or profit capturing abstract in this paper a model of taxation of foreign source corporate income is developed when the output market is not perfectly competitive profit shifting policies similar to those in the new trade literature are also present in the case of foreign direct investment fdi there are however important differences to the new trade theory since in case of fdi i corporate taxation and double taxation relief are the policy instruments rather than output or revenue taxes ii countries are not symmetric in the sense that the host country has the first right to tax the multinational s profit and the home country reacts by providing double taxation relief and iii output but not corporate taxation is specific to imperfectly competitive industries it is argued that a variants of a tax credit are analogous to export subsidies b when the home country operates a tax credit system the host country s incentive to capture the multinational s profit is bounded under imperfect competition c when the host country offers a tax holiday the home country should imitate this policy and d in the presence of perfect competitive industries double taxation relief is a good instrument to target imperfectly competitive industries

commodity futures and market efficiency we propose a comprehensive treatment of the leverage effect i e the relationship between returns and volatility of a specific asset focusing on energy commodities futures namely brent and wti crude oils natural gas and heating oil after estimating the volatility process without assuming any specific form of its behavior we find the volatility to be long term dependent with the hurst exponent on a verge of stationarity and non stationarity to overcome such complication we utilize the detrended cross correlation and the detrending moving average cross correlation coefficients and we find the standard leverage effect for both crude oils and heating oil for natural gas we find the inverse leverage effect additionally we report that the strength of the leverage effects is scale dependent finally we also show that none of the effects between returns and volatility is detected as the long term cross correlated one these findings can be further utilized to enhance forecasting models and mainly in the risk management and portfolio diversification

tax competition in imperfectly competitive markets abstract the literature on strategic trade policy has shown that in imperfectly competitive markets governments have an incentive to subsidize exports of their own firms yet the consequence of the departure from laissez faire is a wasteful subsidy race in contrast this paper shows that even in imperfectly competitive markets there is a strong tendency for laissez faire to prevail the driving force is the firms willingness to exploit tax or subsidy differentials by relocating production a small tax differential induces firms to change their place of production the change in market structure has a negligible effect on the oligopoly equilibrium but a non negligible impact on government revenues when tax policy is non discriminatory governments gain lose by attracting all firms when production is taxed subsidized hence laissez faire is the only equilibrium since from the point of view of the two producing countries laissez faire nondiscrimination pareto dominates the intervention equilibrium discrimination nondiscrimination is a simple device to result in a mutual beneficial outcome

crypto currency bubbles an application of the phillips shi yu 2013 methodology on mt gox bitcoin prices the creation of bitcoin heralded the arrival of digital or crypto currency and has been regarded as a phenomenon since its introduction it has experienced a meteoric rise in price and rapid growth accompanied by huge volatility swings and also attracted plenty of controversies which even involved law enforcement agencies hence claims abound that bitcoin has been characterized by bubbles ready to burst any time e g the recent collapse of bitcoin s biggest exchange mt gox this has earned plenty of coverage in the media but surprisingly not in the academic literature we therefore fill this knowledge gap we conduct an econometric investigation of the existence of bubbles in the bitcoin market based on a recently developed technique that is robust in detecting bubbles that of phillips et al 2013a over the period 2010 2014 we detected a number of short lived bubbles most importantly we found three huge bubbles in the latter part of the period 2011 2013 lasting from 66 to 106 days with the