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Tax Analysis in an Oligopoly Model

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  • Michael L. Katz
  • Harvey S. Rosen

Abstract

In this article we analyze taxation using the conjectural variations model of oligopoly. We demonstrate the way in which the incidence of a tax depends on the pattern of firm interaction. The results obtained have important implications for the controversy surrounding the question of whether a tax on corporate income can be overshifted. We also study normative aspects of taxation. The focus here is on the errors that can arise in excess burden calculations when incorrect assumptions on market structure are made.

Suggested Citation

  • Michael L. Katz & Harvey S. Rosen, 1985. "Tax Analysis in an Oligopoly Model," Public Finance Review, , vol. 13(1), pages 3-20, January.
    • Handle: RePEc:sae:pubfin:v:13:y:1985:i:1:p:3-20
    DOI: 10.1177/109114218501300101
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    1. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "General Equilibrium Analysis of Tax Policies," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 6-24, National Bureau of Economic Research, Inc.
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    6. Tresch, Richard W., 2014. "Public Finance," Elsevier Monographs, Elsevier, edition 3, number 9780124158344.
    7. Bresnahan, Timothy F, 1981. "Duopoly Models with Consistent Conjectures," American Economic Review, American Economic Association, vol. 71(5), pages 934-945, December.
    8. Martin S. Feldstein, 1974. "Tax Incidence in a Growing Economy with Variable Factor Supply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(4), pages 551-573.
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