Auction off the farm: signaling, politics, and economic development
Journal of Public Budgeting, Accounting & Financial Management
ISSN: 1096-3367
Article publication date: 1 March 2006
Abstract
Local public officials rely on tax and non-tax incentive packages to develop their economies. No conclusive evidence supports the economic improvement incentives afford. We investigate, with an experimental approach, the political reasons public officials use tax incentives. The experiment uses simulation gaming to model local economic development as an auction, in that way permitting us to compare the impact that motives, goals, and contexts have on outcomes. Our findings suggest that the majority of economic development competitors fall victim to the “winner’s curse”-overestimating and overbidding the potential payoff for business development.
Citation
Robbins, D. and Miller, G.J. (2006), "Auction off the farm: signaling, politics, and economic development", Journal of Public Budgeting, Accounting & Financial Management, Vol. 18 No. 3, pp. 307-350. https://doi.org/10.1108/JPBAFM-18-03-2006-B004
Publisher
:Emerald Publishing Limited
Copyright © 2006 by PrAcademics Press