Taxation and Market Power When Products Are Durable
Gregory E Goering and
Journal of Regulatory Economics, 1996, vol. 9, issue 1, 83-94
Empirical studies suggest that industries hardest hit be government regulations, such as pollution regulations, are both highly concentrated and manufacture durable products. We analyze a two-period durable goods monopoly model where the firm faces government restrictions in the form of pollution or excise taxes. In contrast to non-durable monopolistic industries, we show that taxes on pollution or an excise tax on output may increase a durable goods monopolist's commitment ability and market power. Indeed, any policy which restricts future output may have the perverse effect of increasing a monopolists's bargaining power with buyers and enhance their profits. Copyright 1996 by Kluwer Academic Publishers
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:9:y:1996:i:1:p:83-94
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11149/PS2
Access Statistics for this article
Journal of Regulatory Economics is currently edited by Michael A. Crew
More articles in Journal of Regulatory Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().