IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/1998048.html
   My bibliography  Save this paper

Taxing market power

Author

Listed:
  • GABSZEWICZ, Jean

    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

  • GRAZZINI, Lisa

    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

Abstract

We investigate the effectiveness of tax and transfer policies in correcting market distortions when the economy is imperfectly competitive. We perform this analysis in the context of an exchange model representing a bilateral oligopoly situation, which constitutes a particular example of a Shapley-Shubik strategic market game.

Suggested Citation

  • GABSZEWICZ, Jean & GRAZZINI, Lisa, 1998. "Taxing market power," LIDAM Discussion Papers CORE 1998048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1998048
    as

    Download full text from publisher

    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1998.html
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gale, David, 1974. "Exchange equilibrium and coalitions : An example," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 63-66, March.
    2. Bloch, Francis & Ghosal, Sayantan, 1997. "Stable Trading Structures in Bilateral Oligopolies," Journal of Economic Theory, Elsevier, vol. 74(2), pages 368-384, June.
    3. B. C. Eaton & Richard G. Harris (ed.), 1997. "Trade, Technology and Economics," Books, Edward Elgar Publishing, number 1020.
    4. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    5. Gabszewicz, J. & Michel, P., 1992. "Oligopoly Equilibria in Exchange Economies," Papiers d'Economie Mathématique et Applications 92.26, Université Panthéon-Sorbonne (Paris 1).
    6. Cordella, Tito & Gabszewicz, Jean J., 1998. ""Nice" Trivial Equilibria in Strategic Market Games," Games and Economic Behavior, Elsevier, vol. 22(1), pages 162-169, January.
    7. Dubey, Pradeep & Shubik, Martin, 1978. "A theory of money and financial institutions. 28. The non-cooperative equilibria of a closed trading economy with market supply and bidding strategies," Journal of Economic Theory, Elsevier, vol. 17(1), pages 1-20, February.
    8. Myles, Gareth D., 1989. "Ramsey tax rules for economies with imperfect competition," Journal of Public Economics, Elsevier, vol. 38(1), pages 95-115, February.
    9. Guesnerie, Roger & Laffont, Jean-Jacques, 1978. "Taxing price makers," Journal of Economic Theory, Elsevier, vol. 19(2), pages 423-455, December.
    10. Aumann, Robert J., 1973. "Disadvantageous monopolies," Journal of Economic Theory, Elsevier, vol. 6(1), pages 1-11, February.
    11. Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-968, October.
    12. Aumann, Robert J & Kurz, Mordecai, 1977. "Power and Taxes," Econometrica, Econometric Society, vol. 45(5), pages 1137-1161, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ascari, Guido & Bertoletti, Paolo & Menegatti, Mario, 2005. "Taxing a monopolist," Research in Economics, Elsevier, vol. 59(4), pages 321-334, December.
    2. Lasserre, Pierre & Soubeyran, Antoine, 2003. "A Ricardian model of the tragedy of the commons," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 29-45, January.
    3. Bertrand Crettez & Pierre-André Jouvet & Ludovic A. Julien, 2014. "Tax Policy in a Simple General Oligopoly Equilibrium Model with Pollution Permits," Working Papers 1413, Chaire Economie du climat.
    4. GRAZZINI, Lisa, 2000. "Ad valorem and per unit taxation in an oligopoly model," LIDAM Discussion Papers CORE 2000054, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Cyrinus B. Elegbede & Ludovic A. Julien & Louis Mesnard, 2022. "On preferences and taxation mechanisms in strategic bilateral exchange," Review of Economic Design, Springer;Society for Economic Design, vol. 26(1), pages 43-73, March.
    6. Julien, Ludovic A., 2011. "Unemployment equilibrium and economic policy in mixed markets," Economic Modelling, Elsevier, vol. 28(4), pages 1931-1940, July.
    7. Leonidas C. Koutsougeras & Nicholas Ziros, 2015. "The Second Welfare Theorem in Economies with Non-Walrasian Markets," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(3), pages 415-432, June.
    8. GABSZEWICZ, Jean & GRAZZINI, Lisa, 2000. "Strategic multilateral exchange and taxes," LIDAM Discussion Papers CORE 2000063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Ludovic A. Julien & Anicet Kabre & Louis de Mesnard, 2022. "Pollution in strategic multilateral exchange: taxing emissions or trading on permit markets?," Post-Print hal-03791673, HAL.
    10. Julien, Ludovic A., 2009. "Conjectural variations, symmetric equilibria and economic policy," Economic Modelling, Elsevier, vol. 26(5), pages 1115-1120, September.
    11. A. Dickson & R. Hartley, 2005. "The strategic Marshallian cross and bilateral oligopoly," Economics Discussion Paper Series 0523, Economics, The University of Manchester.
    12. Toraubally, Waseem A., 2018. "Large market games, the law of one price, and market structure," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 13-26.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. GABSZEWICZ, Jean & GRAZZINI, Lisa, 2000. "Strategic multilateral exchange and taxes," LIDAM Discussion Papers CORE 2000063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Cyrinus B. Elegbede & Ludovic A. Julien & Louis Mesnard, 2022. "On preferences and taxation mechanisms in strategic bilateral exchange," Review of Economic Design, Springer;Society for Economic Design, vol. 26(1), pages 43-73, March.
    3. BLOCH, Francis & FERRER, Hélène, 1999. "Trade fragmentation and coordination in bilateral oligopolies," LIDAM Discussion Papers CORE 1999008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. A. Dickson & R. Hartley, 2005. "The strategic Marshallian cross and bilateral oligopoly," Economics Discussion Paper Series 0523, Economics, The University of Manchester.
    5. Dickson, Alex & Hartley, Roger, 2008. "The strategic Marshallian cross," Games and Economic Behavior, Elsevier, vol. 64(2), pages 514-532, November.
    6. Bloch, Francis & Ferrer, Helene, 2001. "Trade Fragmentation and Coordination in Strategic Market Games," Journal of Economic Theory, Elsevier, vol. 101(1), pages 301-316, November.
    7. Amir, Rabah & Bloch, Francis, 2009. "Comparative statics in a simple class of strategic market games," Games and Economic Behavior, Elsevier, vol. 65(1), pages 7-24, January.
    8. Busetto, Francesca & Codognato, Giulio & Julien, Ludovic, 2020. "Atomic Leontievian Cournotian traders are always Walrasian," Games and Economic Behavior, Elsevier, vol. 122(C), pages 318-327.
    9. Ludovic A. Julien, 2017. "Hierarchical Competition and Heterogeneous Behavior in Noncooperative Oligopoly Markets," Post-Print hal-01637298, HAL.
    10. Régis Breton & Bertrand Gobillard, 2005. "Robustness of equilibrium price dispersion in finite market games," Post-Print halshs-00257207, HAL.
    11. Ludovic A. Julien & Fabrice Tricou, 2008. "Market Price Mechanisms and Stackelberg General Equilibria," Working Papers hal-04140726, HAL.
    12. M. Lombardi & S. Tonin, 2020. "On trade in bilateral oligopolies with altruistic and spiteful agents," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 203-218, October.
    13. Francesca Busetto & Giulio Codognato & Sayantan Ghosal & Ludovic Julien & Simone Tonin, 2020. "Existence and optimality of Cournot–Nash equilibria in a bilateral oligopoly with atoms and an atomless part," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(4), pages 933-951, December.
    14. Alex Dickson & Simone Tonin, 2021. "An introduction to perfect and imperfect competition via bilateral oligopoly," Journal of Economics, Springer, vol. 133(2), pages 103-128, July.
    15. Bloch, Francis & Ferrer, Helene, 2001. "Strategic complements and substitutes in bilateral oligopolies," Economics Letters, Elsevier, vol. 70(1), pages 83-87, January.
    16. Bio-Akanni ELEGBEDE, 2017. "Oligopoly Equilibrium with differentiated commodities: a computation of two models," Working Papers CREGO 1171201, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    17. Ludovic A. Julien & Gagnie Pascal Yebarth, 2024. "Pareto-Optimal Taxation Mechanism in Noncooperative Strategic Bilateral Exchange," EconomiX Working Papers 2024-19, University of Paris Nanterre, EconomiX.
    18. Ghosal, Sayantan & Tonin, Simone, 2014. "Non-Cooperative Asymptotic Oligopoly in Economies with Infinitely Many Commodities," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-23, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Ludovic A. Julien, 2024. "Noncooperative oligopoly equilibrium in markets with hierarchical competition," International Journal of Game Theory, Springer;Game Theory Society, vol. 53(2), pages 325-371, June.
    20. Francesca Busetto & Giulio Codognato & Sayantan Ghosal, 2012. "Noncooperative Oligopoly in Markets with a Continuum of Traders: A Limit Theorem," EconomiX Working Papers 2012-49, University of Paris Nanterre, EconomiX.

    More about this item

    Keywords

    Imperfect competition; Taxation; Strategic market game;
    All these keywords.

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1998048. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.