Taxation and market power

Kai Konrad, Florian Morath and Wieland Müller

Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" from WZB Berlin Social Science Center

Abstract: We analyze the incidence and welfare effects of unit sales taxes in experimental monopoly and Bertrand markets. We find, in line with economic theory, that firms with no market power are able to shift a high share of a tax burden on to consumers, independent of whether buyers are automated or human players. In monopoly markets, a monopolist bears a large share of the burden of a tax increase. With human buyers, however, this share is smaller than with automated buyers as the presence of human buyers constrains the pricing behavior of a monopolist.

Keywords: Tax incidence; monopoly; Bertrand competition; experiment (search for similar items in EconPapers)
JEL-codes: C72 C92 H22 L12 L13 (search for similar items in EconPapers)
Date: 2010
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https://www.econstor.eu/bitstream/10419/54583/1/682401145.pdf (application/pdf)

Related works:
Journal Article: Taxation and Market Power (2014)
Journal Article: Taxation and Market Power (2014)
Working Paper: Taxation and market power (2014)
Working Paper: Taxation and Market Power (2014)
Working Paper: Taxation and Market Power (2010)
Working Paper: Taxation and Market Power (2010)
Working Paper: Taxation and Market Power (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbfff:spii201007

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