Estimating the effect of tax reform in differentiated product oligopolistic markets

Chaim Fershtman*, Neil Gandal, Sarit Markovich

*Corresponding author for this work

Research output: Contribution to journalArticle

17 Scopus citations

Abstract

The incidence of taxation has been extensively discussed in the public finance literature but mainly within a competitive market setting or within a homogenous good (Cournot type) oligopoly. In a differentiated product oligopoly, the effect of taxation can be more complex as the rate of taxation may affect not only the prices, but also the profile and quality of products that are sold in the market. In this paper, we examine the effects of changing tax regimes in a differentiated product oligopoly. In order to illustrate our approach, we employ data from one such market: the automobile market in Israel.

Original languageEnglish (US)
Pages (from-to)151-170
Number of pages20
JournalJournal of Public Economics
Volume74
Issue number2
DOIs
StatePublished - Nov 1999

Keywords

  • Differentiated product oligopoly
  • H2
  • L8
  • Taxation

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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