The loss of international competitiveness of domestic industries remains a key obstacle to the implementation of effective carbon prices in a world without harmonized climate policies. We analyze countries’ non-cooperative choices of emissions taxes under imperfect competition and mobile...

We investigate the relationship between market structure and platforms' incentives to adopt technological innovations in two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider innovations that...

This paper analyzes the optimal level of public debt when taxes are used not only for funding public expenditures but also for correcting externalities from climate change. Taking into account externalities implies that the optimal policy deviates from tax smoothing. Provided cumulative marginal...

We examine tippy network markets that accommodate price discrimination. The analysis shows that when a mild equilibrium refinement, the monotonicity criterion, is adopted, network competition may have a unique subgame-perfect equilibrium regarding the winner’s identity; the prevailing brand...

Using a Cournot oligopoly model with an endogenous number of firms and evasion of indirect taxes, this paper shows that more intense competition may have the negative side-effect of eroding tax revenues by increasing tax evasion. This will be the case if market entry costs decrease. A similar...

This paper investigates the choice of apportionment factors under a corporate tax system of Formula Apportionment. In contrast to perceived wisdom, we show that the apportionment formula contains both mobile (capital) and immobile (labor) factors if jurisdictions are granted full fiscal autonomy...

Political connections between firms and autocratic regimes are not secret and often even publicly displayed in many developing economies. We argue that tying a firm's available rent to a regime's survival acts as a credible commitment forcing entrepreneurs to support the government and to exert...

This paper provides a new foundation of soft drink taxation. We abstract from externalities and internalities previously used to justify such taxation and, instead, emphasize that neither explicit nor implicit markets and prices for sugar content can be expected to emerge. Hence, in the absence...

Within a general equilibrium model, this paper identifies a novel animal welfare externality that occurs if the private animal friendliness in a market economy falls short of the social animal friendliness used by the social planner when determining the efficient allocation. The animal welfare...