Tax Incidence Under Imperfect Competition
12 Pages Posted: 29 Jun 2011
Date Written: 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.
Keywords: Tax Incidence, Market Power, Conjectural Variations, Conduct Parameter
JEL Classification: H22, L13
Suggested Citation: Suggested Citation