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| Michele Dell´Era |
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| ''Financial transaction taxes and expert advice'' |
| ( 2022, Vol. 42 No.4 ) |
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| This note uses strategic communication to study the impact of a financial transaction tax on expert advice to traders. The central finding is that the tax worsens expert advice by strengthening experts' incentives to misreport information. Such negative tax impact is moderated by expert commissions and exacerbated by uncertainty. Expert advice thus emerges as a new channel through which the tax makes traders less informed. This result advances the debate on tax suitability beyond the conventional arguments. |
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| Keywords: Financial Transaction Tax, Expert Advice, Externality, Informational Efficiency, Tax Distortion, Expert Compensation |
JEL: G1 - General Financial Markets
D8 - Information, Knowledge, and Uncertainty: General |
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| Manuscript Received : May 19 2022 | | Manuscript Accepted : Dec 30 2022 |
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