Optimal tax policy for single homogeneous commodity on n markets with export costs as a Stackelberg game
Taxation is one of the most powerful instruments of fiscal policy, affecting economic growth and investments, as well as competitiveness of companies. Therefore, designing the optimal tax policy is of crucial importance for any government. This study formulates the problem of determining optimal tax...
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| Veröffentlicht in: | Central European journal of operations research 2023-09, Vol.31 (3), p.873-890 |
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| description | Taxation is one of the most powerful instruments of fiscal policy, affecting economic growth and investments, as well as competitiveness of companies. Therefore, designing the optimal tax policy is of crucial importance for any government. This study formulates the problem of determining optimal tax policy for single homogeneous commodity produced by
n
competing companies located in
n
different countries with export costs as a Stackelberg game with multiple followers. Companies produce the commodity in their country of origin and sell it on all
n
markets. Countries have different tax systems. If a company is selling the product in a foreign country, it has to pay export costs consisting of transportation costs and duty costs. Government of country
i
is the leader and makes the tax amount decision with the objective of maximizing its tax revenue. Companies are the followers. They make decisions about production and export quantities in order to maximize their profit functions. The study derives the optimal tax policy, i.e. the optimal tax amount and the optimal value of tax revenue function as well as companies’ optimal production and export quantities. It discusses the properties of the tax revenue function and analyzes the effect of unit increase of taxes on optimal production and export quantities as well as on companies’ revenue and profit functions. Finally, the study shows how the tax burden is divided between producers and consumers. |
| doi_str_mv | 10.1007/s10100-022-00822-4 |
| format | Article |
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n
competing companies located in
n
different countries with export costs as a Stackelberg game with multiple followers. Companies produce the commodity in their country of origin and sell it on all
n
markets. Countries have different tax systems. If a company is selling the product in a foreign country, it has to pay export costs consisting of transportation costs and duty costs. Government of country
i
is the leader and makes the tax amount decision with the objective of maximizing its tax revenue. Companies are the followers. They make decisions about production and export quantities in order to maximize their profit functions. The study derives the optimal tax policy, i.e. the optimal tax amount and the optimal value of tax revenue function as well as companies’ optimal production and export quantities. It discusses the properties of the tax revenue function and analyzes the effect of unit increase of taxes on optimal production and export quantities as well as on companies’ revenue and profit functions. Finally, the study shows how the tax burden is divided between producers and consumers.</description><identifier>ISSN: 1435-246X</identifier><identifier>EISSN: 1613-9178</identifier><identifier>DOI: 10.1007/s10100-022-00822-4</identifier><language>eng</language><publisher>Berlin/Heidelberg: Springer Berlin Heidelberg</publisher><subject>Ad valorem taxes ; Analysis ; Business and Management ; Commodities ; Consumption ; Corporate profits ; Costs ; Duopoly ; Economic development ; Economic growth ; Equilibrium ; Export taxes ; Exports ; Fiscal policy ; Free trade ; Game theory ; Management research ; Management science ; Marketing ; Markets ; Monopolistic competition ; Operating costs ; Operations research ; Operations Research/Decision Theory ; Optimization ; Production management ; Revenue ; Subsidies ; Tax policy ; Tax rates ; Tax revenues ; Taxation ; Textbooks</subject><ispartof>Central European journal of operations research, 2023-09, Vol.31 (3), p.873-890</ispartof><rights>The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2022. Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.</rights><rights>COPYRIGHT 2023 Springer</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c448t-89238a09f7841d75b6998b550d08ccedb97c6af1988a2d2ec8222a75d202b0363</citedby><cites>FETCH-LOGICAL-c448t-89238a09f7841d75b6998b550d08ccedb97c6af1988a2d2ec8222a75d202b0363</cites><orcidid>0000-0003-2986-6345</orcidid></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://link.springer.com/content/pdf/10.1007/s10100-022-00822-4$$EPDF$$P50$$Gspringer$$H</linktopdf><linktohtml>$$Uhttps://link.springer.com/10.1007/s10100-022-00822-4$$EHTML$$P50$$Gspringer$$H</linktohtml><link.rule.ids>314,776,780,27901,27902,41464,42533,51294</link.rule.ids></links><search><creatorcontrib>Lukac, Zrinka</creatorcontrib><title>Optimal tax policy for single homogeneous commodity on n markets with export costs as a Stackelberg game</title><title>Central European journal of operations research</title><addtitle>Cent Eur J Oper Res</addtitle><description>Taxation is one of the most powerful instruments of fiscal policy, affecting economic growth and investments, as well as competitiveness of companies. Therefore, designing the optimal tax policy is of crucial importance for any government. This study formulates the problem of determining optimal tax policy for single homogeneous commodity produced by
n
competing companies located in
n
different countries with export costs as a Stackelberg game with multiple followers. Companies produce the commodity in their country of origin and sell it on all
n
markets. Countries have different tax systems. If a company is selling the product in a foreign country, it has to pay export costs consisting of transportation costs and duty costs. Government of country
i
is the leader and makes the tax amount decision with the objective of maximizing its tax revenue. Companies are the followers. They make decisions about production and export quantities in order to maximize their profit functions. The study derives the optimal tax policy, i.e. the optimal tax amount and the optimal value of tax revenue function as well as companies’ optimal production and export quantities. It discusses the properties of the tax revenue function and analyzes the effect of unit increase of taxes on optimal production and export quantities as well as on companies’ revenue and profit functions. 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tax policy for single homogeneous commodity on n markets with export costs as a Stackelberg game</title><author>Lukac, Zrinka</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c448t-89238a09f7841d75b6998b550d08ccedb97c6af1988a2d2ec8222a75d202b0363</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2023</creationdate><topic>Ad valorem taxes</topic><topic>Analysis</topic><topic>Business and Management</topic><topic>Commodities</topic><topic>Consumption</topic><topic>Corporate profits</topic><topic>Costs</topic><topic>Duopoly</topic><topic>Economic development</topic><topic>Economic growth</topic><topic>Equilibrium</topic><topic>Export taxes</topic><topic>Exports</topic><topic>Fiscal policy</topic><topic>Free trade</topic><topic>Game theory</topic><topic>Management research</topic><topic>Management science</topic><topic>Marketing</topic><topic>Markets</topic><topic>Monopolistic 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Therefore, designing the optimal tax policy is of crucial importance for any government. This study formulates the problem of determining optimal tax policy for single homogeneous commodity produced by
n
competing companies located in
n
different countries with export costs as a Stackelberg game with multiple followers. Companies produce the commodity in their country of origin and sell it on all
n
markets. Countries have different tax systems. If a company is selling the product in a foreign country, it has to pay export costs consisting of transportation costs and duty costs. Government of country
i
is the leader and makes the tax amount decision with the objective of maximizing its tax revenue. Companies are the followers. They make decisions about production and export quantities in order to maximize their profit functions. The study derives the optimal tax policy, i.e. the optimal tax amount and the optimal value of tax revenue function as well as companies’ optimal production and export quantities. It discusses the properties of the tax revenue function and analyzes the effect of unit increase of taxes on optimal production and export quantities as well as on companies’ revenue and profit functions. Finally, the study shows how the tax burden is divided between producers and consumers.</abstract><cop>Berlin/Heidelberg</cop><pub>Springer Berlin Heidelberg</pub><doi>10.1007/s10100-022-00822-4</doi><tpages>18</tpages><orcidid>https://orcid.org/0000-0003-2986-6345</orcidid></addata></record> |
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| identifier | ISSN: 1435-246X |
| ispartof | Central European journal of operations research, 2023-09, Vol.31 (3), p.873-890 |
| issn | 1435-246X 1613-9178 |
| language | eng |
| recordid | cdi_proquest_journals_2826996595 |
| source | SpringerLink Journals; EBSCOhost Business Source Complete |
| subjects | Ad valorem taxes Analysis Business and Management Commodities Consumption Corporate profits Costs Duopoly Economic development Economic growth Equilibrium Export taxes Exports Fiscal policy Free trade Game theory Management research Management science Marketing Markets Monopolistic competition Operating costs Operations research Operations Research/Decision Theory Optimization Production management Revenue Subsidies Tax policy Tax rates Tax revenues Taxation Textbooks |
| title | Optimal tax policy for single homogeneous commodity on n markets with export costs as a Stackelberg game |
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