Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society
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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

Unionized Mixed Oligopoly and Privatization with Excess Burden of Taxation

Vol.26, No.4, December , 83–103



  •   (Graduate School of International Studies, Pusan National University)

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Abstract  

By introducing the excess burden of taxation into unionized mixed and privatized oligopolies, we show that (i) regardless of the number of private firm, privatization of public firm is always desirable when the degree of the excess burden of taxation is small and (ii) when the degree of the excess burden of taxation is large, whether privatization or nationalization is desirable depends on the critical value of the excess burden of taxation. In contrast to the existing works on mixed oligopolies, we find that privatization can enhance social welfare regardless of the number of firms under mild conditions. Thus, the excess burden of taxation is relatively low for industrial countries since privatization is considered a powerful instrument for reducing distortionary taxation for policy reasons.


Keywords
   Union, Excess Burden of Taxation, Mixed Oligopoly, Privatization

JEL classification codes
   D43, H44, J51, L13, L33, M21
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