Vol. 23, No. 2

Klaus Kultti and Eeva Mauring:
Search with Homogeneous and Heterogeneous Agents (pp. 62–72)


Two types of agents want to pair. They meet randomly, and if each is acceptable to each other pairing takes place. One type’s tastes are uniform over the other type while the other type’s tastes are not. We assume nontransferable utility and study whether the outcome is more efficient when the type heterogeneous in tastes searches or vice versa.

(JEL: C78, D4)

Annette Alstadsæter and Knut Reidar Wangen:
Small Corporations’ Income Shifting through Choice of Ownership Structure – a Norwegian Case (pp. 73–87)


We analyze how small business owners respond to the tax-minimizing incentives inherent in the Norwegian version of the dual income tax to shift income from the personal to the corporate tax base. The corporations in our sample seem to respond to tax incentives and change their ownership structure to qualify for reduction in overall tax payments. We document substantial cohort effects end suggest that postreform corporations were better able to form tax-reducing coalitions, compared with prereform corporations. It also appears that corporations who participate in this activity are more profitable and have more to gain from tax-minimizing income shifting.

(JEL: D21, H25, H3)

Roland Magnusson:
Efficiency of Non-cooperative Emission Taxes in Perfectly Competitive Markets (pp. 88–93)


With the current efforts to regulate the emissions of greenhouse gases and other cross border pollutants, the question of environmental federalism is as important as ever. By generalising the model presented by Oates and Schwab (1987, 1988), we show that the well established result within environmental federalism, that the government of a small country has no incentive to depart from the cooperative choice of environmental standards, does not hold for pollutants that have regional or global characteristics, as e.g. sulphur dioxide and carbon dioxide has.

(JEL: H77, Q58)

Finnish Economic Papers 2/2010