The Domar-Musgrave phenomenon and adverse selection

Konrad, Kai A. (1991): The Domar-Musgrave phenomenon and adverse selection. In: European Journal of Political Economy, Bd. 7, Nr. 1: S. 41-53

Abstract

In this paper, the incentive to increased risk taking caused by taxes on risky revenues (the Domar-Musgrave phenomenon) is revaluated. In a capital market equilibrium with adverse selection, the tax is not ineffective. An additional risk consolidation takes place within the collected tax proceeds. If owners of entrepreneurial firms cannot react via a change of ownership structure, then the tax directly affects the investment decision. In other cases, the tax induces firms' owners to cut back share issues. © 1991.

• Dokumententyp: Zeitschriftenartikel
• Publikationsform: Publisher's Version
• Fakultät: Volkswirtschaft > Lehrstühle > MPI für Steuerrecht und Öffentliche Finanzen
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 0176-2680
• Sprache: Englisch