Specific excise taxation in a unionised differentiated duopoly
AbstractThis article considers the incidence and welfare effects of a specific excise tax in a unionized duopoly model with differentiated products, linear demand and cost curves, and wage bargaining. The article allows for both Cournot and Bertrand competition. The article shows that unionization lowers the degree of undershifting of the tax on the producer's net price, the marginal increase in the consumer's price, and the employment loss. The excess burden of an equal revenue tax is higher with a unionized labor market and higher with Cournot than Bertrand competition. Unionization increases the optimal output subsidy with wage bargaining. This paper is published in Public Finance Review, Vol. 28, No. 4, 351-371 (2000).
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Bibliographic InfoPaper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2000-06.
Date of creation: 01 Jan 2000
Date of revision:
Tax incidence; excise duty; unionized oligopoly;
Other versions of this item:
- Michele Santoni, 2000. "Specific Excise Taxation in a Unionized Differentiated Duopoly," Public Finance Review, , vol. 28(4), pages 351-371, July.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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