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A structural model of entry and fiscal policy is presented. It shows that taxation of variable production costs can increase product prices, lower competition, and reduce the availability of new products in small markets. The model's test is based on a unique nationwide fiscal experiment. We...
Persistent link: https://www.econbiz.de/10013320527
A structural model of entry and fiscal policy is presented. It shows that taxation of variable production costs can increase product prices, lower competition, and reduce the availability of new products in small markets. Existing theoretical models of entry and taxation either assume imperfect...
Persistent link: https://www.econbiz.de/10014074425
problematic, particularly in dynamic markets, because economic theory does not often allow a confident prediction of what would … cases should be required to support their claims with a plausible theory and evidence, and that the burden should be greater …
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with few small firms, sticky pricing is dominant. Each of these findings is consistent with the theory of Edgeworth Cycles …
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