In this paper, we study the optimal tax policy in a differential oligopoly game where the competing firms share the access to a productive renewable resource. We show that, in a Feedback Nash Equilibrium of the game, a linear Markov tax, imposed on the output, and specified as an affine function of the available resource stock, leads the competing firms to produce the socially optimal quantities over time, thus overcoming the dynamic interplay between the tragedy of the commons and the firms' market power. The optimal tax turns out to be independent from the resource stock in a monopoly, and it cannot be defined in a duopoly.

(2020). Optimal taxation in a common resource oligopoly game [journal article - articolo]. In JOURNAL OF ECONOMICS. Retrieved from https://hdl.handle.net/10446/234450

Optimal taxation in a common resource oligopoly game

Bisceglia, Michele
2020-01-01

Abstract

In this paper, we study the optimal tax policy in a differential oligopoly game where the competing firms share the access to a productive renewable resource. We show that, in a Feedback Nash Equilibrium of the game, a linear Markov tax, imposed on the output, and specified as an affine function of the available resource stock, leads the competing firms to produce the socially optimal quantities over time, thus overcoming the dynamic interplay between the tragedy of the commons and the firms' market power. The optimal tax turns out to be independent from the resource stock in a monopoly, and it cannot be defined in a duopoly.
articolo
Bisceglia, Michele
(2020). Optimal taxation in a common resource oligopoly game [journal article - articolo]. In JOURNAL OF ECONOMICS. Retrieved from https://hdl.handle.net/10446/234450
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10446/234450
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