Abstract
This paper shows that unit taxation can be welfare superior to ad valorem taxation in asymmetric and differentiated oligopolies if the goods are sufficiently differentiated, the cost variance is sufficiently large and the ad valorem tax rate is sufficiently high. Moreover, this result holds under either Cournot competition or Bertrand competition.
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Wang, X.H., Zhao, J. On the efficiency of indirect taxes in differentiated oligopolies with asymmetric costs. J Econ 96, 223–239 (2009). https://doi.org/10.1007/s00712-008-0046-7
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DOI: https://doi.org/10.1007/s00712-008-0046-7