Journal article
Uniform, efficient and independent Ramsey taxes across markets
Games and economic behavior, Vol.138, pp.373-386
03/01/2023
DOI: 10.1016/j.geb.2023.01.010
Abstract
In a perfectly competitive market and in multi-product monopoly with linear demands and costs, the socially optimal taxes are Ramsey independent taxes (RIT), which are independent of each other, have a simple structure, reduce all products proportionally, and affect consumers and firms in similar ways. Under imperfect competition, while not optimal in general for both social welfare and consumer surplus objectives, RIT nevertheless retain attractive uniform effects in all markets. In asymmetric Cournot and Bertrand oligopolies, the socially and consumer-efficient taxes are surprisingly complex even in simple settings. Postulating a third objective of taxation as the average of social welfare and consumer surplus restores the optimality of RIT. Finally, another important property is that RIT impose equal corresponding marginal costs across all types of markets, as required for economy-wide efficient taxation.
Details
- Title: Subtitle
- Uniform, efficient and independent Ramsey taxes across markets
- Creators
- Rabah Amir - Department of Economics, University of Iowa, Iowa City, IA 52242, USAJim Y. Jin - University of St AndrewsLaurence Lasselle - University of St Andrews
- Resource Type
- Journal article
- Publication Details
- Games and economic behavior, Vol.138, pp.373-386
- DOI
- 10.1016/j.geb.2023.01.010
- ISSN
- 0899-8256
- eISSN
- 1090-2473
- Publisher
- Elsevier Inc
- Grant note
- DOI: 10.13039/100008893, name: University of Iowa
- Language
- English
- Date published
- 03/01/2023
- Academic Unit
- Economics
- Record Identifier
- 9984380532602771
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