Tacit collusion and international commodity taxation
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Date
2003-01Metadata
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- Discussion papers (SAM) [640]
Abstract
The paper employs a model of dynamic price competition to study how
international commodity taxation affects the stability of collusive agreements
when producers in an international duopoly agree not to export into each
other’s home market. We consider both the choice of international tax principle
and the harmonization of tax rates and differentiate between a setting
where production costs differ between countries, and a setting where exogenous
tax rate differentials are the only asymmetry. The conclusions derived
from this model differ strongly from those obtained under the assumption of competitive product markets.
Publisher
Norwegian School of Economics and Business Administration. Department of EconomicsSeries
Discussion paper2003:2