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| Gagnie Pascal Yebarth |
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| ''Per unit versus ad valorem taxes under strategic bilateral trade'' |
| ( 2025, Vol. 45 No.1 ) |
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| This paper compares ad valorem and per-unit taxes in a bilateral market where all traders have market power. To do so, we use a simple prototype of strategic market games, namely bilateral oligopoly models, and show that ad valorem taxation welfare-dominates per-unit taxation under strategic bilateral trade. Moreover, ad valorem and per-unit taxes have qualitatively different effects on strategic equilibrium offers. |
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| Keywords: Ad valorem taxation, Noncooperative oligopoly, Per unit taxation, Welfare |
JEL: C7 - Game Theory and Bargaining Theory
H2 - Taxation, Subsidies, and Revenue: General |
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| Manuscript Received : Nov 12 2024 | | Manuscript Accepted : Mar 30 2025 |
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