Tax Incidence Under Imperfect Competition

12 Pages Posted: 29 Jun 2011  

Philip Reny

University of Chicago - Department of Economics

Simon Wilkie

University of Southern California Law School

Michael A. Williams

Competition Economics LLC

Date Written: June 28, 2011

Abstract

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

Reny, Philip and Wilkie, Simon and Williams, Michael A., Tax Incidence Under Imperfect Competition (June 28, 2011). Available at SSRN: https://ssrn.com/abstract=1874346 or http://dx.doi.org/10.2139/ssrn.1874346

Philip Reny (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-8192 (Phone)
773-702-7587 (Fax)

Simon Wilkie

University of Southern California Law School ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

Michael A. Williams

Competition Economics LLC ( email )

2000 Powell Street
Suite 510
Emeryville, CA 94608
United States

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