Department of Economics

AUTHOR

Stamatopoulos Giorgos

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Political Economy , Theory - 2023

A Strategic Tax Mechanism

We analyze a novel tax mechanism in imperfectly competitive markets. The government announces an excise tax rate and auctions-off a number of tax exemptions. Namely, it invites the firms in a market to acquire the right to be exempted from the excise tax. The highest bidders are exempted by paying their bids; and all other firms remain subject to it.

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