Taxation and market power
- Author(s)
- Wieland Müller, Kai Konrad, Florian Morath
- Abstract
We analyze the incidence and welfare effects of unit sales tax increases in experimental monopoly and Bertrand markets. We find, in line with economic theory, that firms with no market power are able to shift a high share of the tax burden to consumers, independent of whether buyers are automated or human players. In monopoly markets, a monopolist bears a large share of the burden of a tax increase. With human buyers, however, this share is smaller than with automated buyers, as the presence of human buyers constrains the pricing behaviour of a monopolist. Several control treatments corroborate this finding.
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- Max-Planck-Institut für Steuerrecht und Öffentliche Finanzen
- Journal
- Canadian Journal of Economics
- Volume
- 47
- Pages
- 173-202
- No. of pages
- 30
- DOI
- https://doi.org/10.1111/caje.12067
- Publication date
- 02-2014
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502047 Economic theory
- ASJC Scopus subject areas
- Economics and Econometrics
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/taxation-and-market-power(0bcbe0e4-3a93-47a9-be1a-bde0af31a034).html