Tax Incidence Under Imperfect Competition
University of Chicago - Department of Economics
University of Southern California Law School
Michael A. Williams
Competition Economics LLC
June 28, 2011
In a 2001 article that appeared in the International Journal of Industrial Organization, Delipalla and O’Donnell derive a formula for the incidence of an ad valorem or specific tax in a conjectural variations oligopoly model with potentially asymmetric firms (Delipalla and O’Donnell, 2001). However, the formula they derive is incorrect. We provide a brief discussion of their error and derive the correct formula.
Number of Pages in PDF File: 12
Keywords: Tax Incidence, Market Power, Conjectural Variations, Conduct Parameter
JEL Classification: H22, L13
Date posted: June 29, 2011
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