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Optimal taxation with Cournot oligopoly

Reinhorn, L.J.

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Abstract

This paper studies optimal linear taxation in a general equilibrium model with Cournot oligopoly. The main result is the following. With imperfect competition the tendency toward “inverse elasticities” tax rules will be weakened and may even be reversed. That is, an upward sloping relationship may exist between an industry’s optimal tax rate and its own-price elasticity of demand, unlike the perfectly competitive case.

Citation

Reinhorn, L. (2005). Optimal taxation with Cournot oligopoly. The B.E. Journal of Economic Analysis & Policy, 5(1),

Journal Article Type Article
Publication Date Jan 1, 2005
Deposit Date Aug 18, 2008
Publicly Available Date Aug 18, 2008
Journal The B.E. Journal of Economic Analysis & Policy
Electronic ISSN 1935-1682
Publisher De Gruyter
Peer Reviewed Peer Reviewed
Volume 5
Issue 1
Keywords Optimal taxation, Cournot oligopoly.
Public URL https://durham-repository.worktribe.com/output/1601256
Publisher URL http://www.bepress.com/bejeap/2005.html

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Copyright Statement
Copyright c
2005 by the authors. All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written permission
of the publisher, bepress, which has been given certain exclusive rights by the author. Advances
in Economic Analysis & Policy is produced by The Berkeley Electronic Press (bepress).
http://www.bepress.com/bejeap





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