Would Big Tobacco Have Been Better?: the Social Welfare Implications of Antitrust Action in the Presence of Negative Externalities
AbstractThis paper considers the role of antitrust action in markets with negative externalities and the social welfare consequences of the 1911 break-up of American Tobacco. A theoretical model shows that monopoly can be the preferred market structure in some cases. We provide rough estimates of the magnitude of the excise tax necessary to offset external costs in the cigarette industry and compare the estimates to current tax levels.
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Bibliographic InfoPaper provided by Wellesley College - Department of Economics in its series Papers with number 99-07.
Length: 29 pages
Date of creation: 1999
Date of revision:
SOCIAL WELFARE ; TOBACCO ; TAXATION ; ANTITRUST LEGISLATION;
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L4 - Industrial Organization - - Antitrust Issues and Policies
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
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- Tore Nilssen, 2011.
"Risk externalities in a payments oligopoly,"
Portuguese Economic Journal,
Springer, vol. 10(3), pages 211-234, December.
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