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This paper is concerned with cross-dependencies between endogenous market structure and tax policy. We extend the Mirrlees (1971) model of income taxation with a monopolistic competition framework with general additively separable consumer preferences. We show that price and variety distortions...
Persistent link: https://www.econbiz.de/10012622731
This paper is concerned with cross-dependencies between endogenous market structure and tax policy. We extend the Mirrlees (1971) model of income taxation with a monopolistic competition framework with general additively separable consumer preferences. We show that price and variety distortions...
Persistent link: https://www.econbiz.de/10013211731
competition and endogenous firms' entry. In the long run the optimal dividend income tax corrects for inefficient entry. The … dividend income tax depends on the form of competition and nature of the sunk entry costs. In particular, it is higher in …
Persistent link: https://www.econbiz.de/10014155820
Random utility models are widely used to study consumer choice. The vast majority of applications make strong assumptions about the marginal utility of income, which restricts income effects, demand curvature and pass-through. We show that flexibly modeling income effects can be important,...
Persistent link: https://www.econbiz.de/10010531065
Random utility models are widely used to study consumer choice. The vast majority of applications assume utility is linear in consumption of the outside good, which imposes that total expenditure on the subset of goods of interest does not affect demand for inside goods and restricts demand...
Persistent link: https://www.econbiz.de/10011884487
We propose a methodology for estimating the competition effects from entry when firms sell differentiated products. We … first derive precise conditions under which Bresnahan and Reiss' entry threshold ratios (ETRs) can be used to test for the … presence and to measure the magnitude of competition effects. We then show how to augment the traditional entry model with a …
Persistent link: https://www.econbiz.de/10014183337
Aim: The purpose of this paper is to bring together theory and policy of (personal) income distribution on the one hand …
Persistent link: https://www.econbiz.de/10012692631
This study explores the implications of rising markups for optimal Mirrleesian income and profit taxation. Using a stylized model with two individuals, the main forces shaping welfare-optimal policies are analytically characterized. Although a higher profit tax has redistributive benefits, it...
Persistent link: https://www.econbiz.de/10013238338
We study an optimal income taxation problem in a Mirrleesian setting with endogenous product prices and positive firm profits. When firm profits are progressively distributed among agents, we show that the public authority uses the price level as a redistributive tool favoring lower prices in...
Persistent link: https://www.econbiz.de/10012863902
Persistent link: https://www.econbiz.de/10009764050