Optimal domestic redistribution and multinational monopoly.

Having a monopoly that is not owned domestically affects a country's income redistribution policies. Assume the government uses lump‐sum taxes to redistribute but cannot regulate the monopolist's price. In many relevant circumstances, a social planner would not equate social marginal utilities of in...

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Published in:Economic Inquiry Vol. 59; no. 3; pp. 1031 - 1047
Main Authors: Hamilton, Jonathan H., Slutsky, Steven M.
Format: Article
Published: Wiley-Blackwell Jul2021
Subjects:
Online Access:View this record in EBSCOhost
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        atl: Optimal domestic redistribution and multinational monopoly.
      aug:
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          Hamilton, Jonathan H.
          Slutsky, Steven M.
        affil:
          Department of Economics, University of Florida, Gainesville Florida,, USA
          School of Finance and Public Administration, Hubei University of Economics, Wuhan, China
      su:
        Monopolies
        Income redistribution
        Consumer preferences
      sug:
        subj:
          Monopolies
          Income redistribution
          Consumer preferences
      keyword:
        endogenous timing
        monopoly
        redistribution
        endogenous timing
        monopoly
        redistribution
      ab: Having a monopoly that is not owned domestically affects a country's income redistribution policies. Assume the government uses lump‐sum taxes to redistribute but cannot regulate the monopolist's price. In many relevant circumstances, a social planner would not equate social marginal utilities of income across individuals. Thus, using aggregate welfare functions as the preferences of a single representative consumer is valid only under restrictive circumstances. The monopolist always prefers to set price before the social planner chooses transfers, while the social planner may not have a first‐mover advantage. Under endogenous timing of their decisions, the government never moves before the monopolist.
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    language: English
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