UNSPECIFIED (2003) Imperfect competition, the marginal cost of public funds and public goods supply. JOURNAL OF PUBLIC ECONOMICS, 87 (7-8). pp. 1719-1746. ISSN 0047-2727

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Abstract

This paper analyses the impact of changes in product market competition on the marginal cost of public funds (MCPF) and public goods supply when distortionary commodity taxes are used to raise revenue. First, less competition (measured by a switch from Bertrand to Cournot conduct, or a decrease in the elasticity of demand) does not necessarily raise the MPCF. Second, even if it does, optimal public good supply does not necessarily fall. The paper also presents a method for modelling Bertrand and Cournot competition in general equilibrium that may be of independent interest. (C) 2002 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions
Journal or Publication Title:	JOURNAL OF PUBLIC ECONOMICS
Publisher:	ELSEVIER SCIENCE SA
ISSN:	0047-2727
Date:	August 2003
Volume:	87
Number:	7-8
Number of Pages:	28
Page Range:	pp. 1719-1746
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/9427

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