Optimal taxation of a monopolistic extractor: are subsidies necessary?
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Date
2008-07
Publication Type
Working Paper
ETH Bibliography
yes
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Abstract
In a standard partial equilibrium model of resource depletion, this paper characterizes and examines the solution to the optimal taxation problem when extraction is monopolistic. The main result is that the family of subgame perfect efficiency-inducing tax/subsidy schemes may include some strict tax policies. This illustrates how the static trade-off between inducing efficiency and raising tax revenues in the presence of market power is relaxed under exhaustibility.
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published
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Journal / series
Economics Working Paper Series
Volume
08/92
Pages / Article No.
Publisher
CER-ETH – Center of Economic Research at ETH Zurich
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Subject
Exhaustible resources; Imperfect competition; Optimal taxation
Organisational unit
03635 - Bretschger, Lucas (emeritus) / Bretschger, Lucas (emeritus)
02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
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