Corporation Tax Asymmetries and Cartel Unity
Tóm tắt
This paper examines the impact of changing the extent to which tax losses are refunded to firms in a model of imperfect competition. It proposes a particular collusive equilibrium in a repeated oligopoly with homogeneous quantity-setting firms. The industry sustains tacit collusion by using credible and severe punishments of deviations. The analysis of the most collusive equilibrium with losses indicates that a tax policy which increases refunds reduces output, increases market price, and therefore strengthens tacit collusion. In addition, the policy increases government revenue. An increase in the corporation tax rate has similar effects.
Tài liệu tham khảo
Abreu, D. (1986). “Extremal Equilibria of Oligopolistic Supergames.” Journal of Economic Theory 39, 191–225.
Abreu, D. (1988). “On the Theory of Infinitely Repeated Games with Discounting.” Econometrica 56, 383–396.
Abreu, D., D. Pearce and E. Stacchetti. (1986). “Optimal Cartel Equilibria with Imperfect Monitoring.” Journal of Economic Theory 39, 251–269.
Abreu, D., D. Pearce and E. Stacchetti. (1990). “Toward a Theory of Discounted Repeated Games with Imperfect Monitoring.” Econometrica 58, 1041–1063.
Atkinson, A. B. and J. E. Stiglitz. (1980). Lectures on Public Economics. Maidenhead, UK: McGraw-Hill.
Auerbach, A. J. (1986). “The Dynamic Effects of Tax Law Asymmetries.” Review of Economic Studies 53, 205–225.
Davidson, C. and L. W. Martin. (1985). “General Equilibrium Tax Incidence under Imperfect Competition: A Quantity-Setting Supergame Analysis.” Journal of Political Economy 93, 1212–1223.
Davidson, C. and L. W. Martin. (1991). “Tax Incidence in a Simple General Equilibrium Model with Collusion and Entry.” Journal of Public Economics 45, 161–190.
Eswaran, M. (1997). “Cartel Unity over the Business Cycle.” Canadian Journal of Economics 30, 644–672.
Gendron, P.-P. (1996). “Corporation Tax Asymmetries: An Oligopolistic Supergame Analysis.” Working Paper No. UT-ECIPA-ECPAP-96–04, Department of Economics and Institute for Policy Analysis, University of Toronto.
Lambson, V. E. (1987). “Optimal Penal Codes in Price-Setting Supergames with Capacity Constraints.” Review of Economic Studies 54, 385–397.
Poddar, S. and M. English. (1997). “Treatment of Tax Losses: Lessons from the Canadian Experience.” In J. G. Head and R. Krever (eds.), Taxation Towards 2000. Sydney: Australian Tax Research Foundation.
Shapiro, C. (1989). “Theories of Oligopoly Behavior.” In R. Schmalensee and R. D. Willig (eds.), Handbook of Industrial Organization, Vol. I. (Amsterdam: North-Holland).