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Incentives To Support The Public Secotr Under Oligopoly

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  • Willner, Johan

Abstract

We analyse a simple economy with a consumption good, an intermediate good and a public good, where there are capitalists, shop-keepers and worker. It follow that the capitalists and the shop-keepers would always vote for a lower tax rate than the workers although preferences are identical. No group would support a larger public sector than in the first-best solution under free entry and exit among the shop-keepers. A low tax rate would increase the number of supporters of low taxes and vice versa.

Suggested Citation

  • Willner, Johan, 1992. "Incentives To Support The Public Secotr Under Oligopoly," Economic Research Papers 268517, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:268517
    DOI: 10.22004/ag.econ.268517
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    Keywords

    Financial Economics; Public Economics;

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