- Volume 13, Number 2 (2025)
COASTAL COMPETITION: THE ROLE OF LOCAL TAX POLICIES IN SHAPING ITALY’S TOURISM ECONOMY
Lukas Matthias Schneider
This paper investigates how tourism taxes are used by municipalities to attract tourists. We analyze how municipalities compete among each other, explicitly accounting for the spatial dimension. This paper provides a novel contribution to the literature on tax competition by explicitly modeling and testing the spatial dimension. First, we present a spatial model of tax competition, which is an adoption of the Hotelling model of imperfect competition in the linear city. We find that tax rates are strategic complements, as a change in taxes of one town will lead to a similar change of tax rates in neighboring towns. Second,...
THE ECONOMICS OF STRATEGIC PRICING AND COMMON SHAREHOLDING STRUCTURES
Ayumi Keiko Tanaka
Price discrimination has substantial social and policy implications and has received attention in the literature. However, prior research on input price discrimination has primarily been limited to single-input situations. We explore the strategic desirability of uniform pricing and contribute to the growing literature on perfectly complementary inputs in vertical markets. We consider a vertically related market in which two symmetric upstream firms provide perfectly complementary inputs for two downstream manufacturers, one of which has a non-controlling interest in its rival. Each upstream firm can choose between two pricing regimes: discriminatory or uniform. This study shows that although uniform pricing limits...
THE EFFECT OF CONSUMER SWITCHING BARRIERS ON TARGETED PRICING STRATEGIES
Luca Antonio Moretti
Behavior-based price discrimination is a pricing strategy frequently observed in membership-based services and it has been studied widely in the literature. This paper considers a two-period behavior-based price discrimination model in which there are two distinct types of consumers with different demands, and a common switching cost is incurred for all customers who switch firms in the second period, regardless of customer type. We assume that firms accepting the switching customers bear the switching cost because they aim to attract customers from rival firms. As switching costs increase, competition for higher-demand customers intensifies. Eventually, in the second period, firms stop...