Multi-part tariffs and differentiated commodity taxation
journal contributionposted on 2019-12-19, 15:50 authored by Anna D'Annunzio, Mohammed Mardan, Antonio RussoAntonio Russo
We study commodity taxation in markets where firms, such as Internet Service Providers, energy suppliers, and payment card platforms, adopt multi-part tariffs. We show that ad valorem taxes can correct underprovision and hence increase welfare, provided the government applies differentiated tax rates to the usage and access parts of the tariffs. We obtain this result in different settings, including vertically interlinked markets, markets where firms adopt menus of tariffs to screen consumers and where they compete with multi-part tariffs. Our results suggest that exempting these markets from taxation may be inefficient.
- Business and Economics
Published inRAND Journal of Economics
Pages786 - 804
- AM (Accepted Manuscript)
Rights holder© The RAND Corporation
Publisher statementThis is the peer reviewed version of the following article: D'Annunzio, A., Mardan, M. and Russo, A. (2020), Multi‐part tariffs and differentiated commodity taxation. The RAND Journal of Economics. 51 (3), pp.786-804, which has been published in final form at https://doi.org/10.1111/1756-2171.12340. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.