Tax Principles, Product Differentiation and the Nature of Competition

Nigar Hashimzade, Hassan Khodavaisi () and Gareth Myles ()
Authors registered in the RePEc Author Service: حسن خداویسی

International Tax and Public Finance, 2005, vol. 12, issue 6, 695-712

Abstract: We analyze the choice between the origin and destination principles of taxation when there is product differentiation and Bertrand competition. If taxes are redistributed to consumers and demand is linear the origin principle dominates the destination principle whatever the degree of product differentiation and extent of economic integration. With nonlinear demand the origin principle dominates if there is sufficient economic integration. When the social value assigned to tax revenue is higher than the private value, the destination principle dominates for intermediate values of product differentiation and economic integration. The same results are also shown to hold with Cournot competition. Copyright Springer Science + Business Media, Inc. 2005

Keywords: commodity taxation; imperfect competition; Bertrand competition; Cournot competition (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (15)

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DOI: 10.1007/s10797-005-0411-1

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