Efficiency comparison of unit and ad valorem taxation in mixed duopoly

Abstract

In this paper, we consider the relative efficiency of unit taxation and ad valorem taxation in terms of welfare implications in different imperfectly competitive markets. Under the assumption that these two taxations can produce the same total output in equilibrium, which is also used by Anderson (2001), we show that ad valorem taxation is always welfare superior to unit taxation under full nationalisation, full privatisation, and partial privatisation.

Environmental attitudes and impacts of privatization on R&D, environment and welfare in a mixed duopoly

“…The environmental tax payment paid by firm i after ER&D is: T i ¼ tð1Àr i Þq i , where t stands for the tax rate (t>0). 8 It is worth noting that Tao et al (2019) compare the efficiency of unit and ad valorem taxation in the mixed duopoly. The profit function for firm i can be expressed as:…”

Tariff simplification, privatization, and welfare superiority

“…Of note, Mujumdar and Pal (1998) and Tao et al. (2019) demonstrated that an ad valorem tax is welfare superior to a specific tax. Considering the shadow cost of public funds, Zhang et al.…”

“…Nonetheless, an increasing number of studies are exploring privatization and trade policies in an international mixed oligopoly market, but only Mujumdar and Pal (1998), Tao et al (2019), and Zhang et al (2020) compared an ad valorem tax and a specific tax in a closed economy. Of note, Mujumdar and Pal (1998) and Tao et al (2019) demonstrated that an ad valorem tax is welfare superior to a specific tax. Considering the shadow cost of public funds, Zhang et al (2020) reported that if the privatization level is low (medium, high), the government must adopt ad valorem (specific, ad valorem) tax.…”

“…Denicolo and Matteuzzi (2000),Collie (2006),Azacis and Collie (2018),Wang et al (2018), andTao et al (2019) also assumed equal total output under two taxation schemes.…”