Profit Taxation and Capital Accumulation in Dynamic Oligopoly Models

Massimo Baldini and Luca Lambertini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We illustrate two differential oligopoly games using, respectively, the capital accumulation dynamics `a la Solow-Nerlove-Arrow, and the capital accumulation dynamics `a la Ramsey. In both settings, we evaluate the effects of (gross) profit taxation, proving that there exist tax rates yielding the same steady state social welfare as under social planning. Contrary to the static approach, our dynamic analysis shows that, in general, profit taxation affects firms decisions concerning capital accumulation and sales. In particular, it has pro-competitive effects provided that the extent of delegation is large enough.

Date: 2002
New Economics Papers: this item is included in nep-fmk and nep-pub
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Profit taxation and capital accumulation in a dynamic oligopoly model (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:435

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