Sunk Costs and Profit Taxation: A

Paolo Panteghini

Scottish Journal of Political Economy, 1996, vol. 43, issue 1, 85-98

Abstract: This paper uses a two-period Von Stackelberg model to study the effects of profit taxation on the behavior of a monopolist when the entry of a potential competitor is threatened. A barrier to entry, consisting of a sunk cost, is assumed. If the potential competitor decides to enter, thus making a loss, deduction is allowed in the following period. This model shows that these tax deductions can make profit taxation be distortive. Copyright 1996 by Scottish Economic Society.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:43:y:1996:i:1:p:85-98

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0036-9292

Access Statistics for this article

Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith

More articles in Scottish Journal of Political Economy from Scottish Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().