Indirect taxation, quality choice, and social welfare

Abstract

This paper takes into account the quality of the products in an oligopolistic framework to examine the superiority of a specific tax versus an ad valorem tax. We find that the government can get more tax revenues by adopting ad valorem tax compared with specific tax. In the case of fixed marginal cost, the consumer surplus and social welfare is higher (lower) under specific tax than ad valorem tax if the marginal cost gap is small (large). When the marginal cost is related to product quality, we find that the consumer surplus and social welfare is higher under specific tax.

Impact of copycatting on the luxury manufacturer's distribution contracts in the e‐commerce era

“…However, these studies have generally ignored product quality as a key factor in supply chain management. Several scholars have recently examined manufacturers' quality decisions and distribution contract choices when selling through platforms (Feng et al, 2020; Luo et al, 2022; Wang et al, 2023). Besides, Zhang et al (2022) and Zhang and Ma (2023) internalized quality decisions and investigated the interaction between product suppliers' quality differentiation strategies and online retailers' choice of sales formats.…”

“Free replacement extended warranty” or “traditional extended warranty”: Optimal extended warranty selection strategy

“…They find that the firm may benefit from the increase of the quality disclosure cost; the increase of encroachment cost may have a negative impact on the firm's profit. Wang and Wang (2021) study the choice of the government tax system taking product quality into account. They point out that product quality will affect the tax system choice of government.…”

Local gambling culture and corporate tax aggressiveness: A trait activation perspective on informal institutions

“…Stable tax revenues are key to healthy development of national economy and people's livelihoods. However, government taxation reduces the cash flow needed for survival and growth of firms, thus increasing the economic pressure (Rego & Wilson, 2012; Wang & Wang, 2022). Firms tend to reduce their tax burden via tax savings and avoidance measures in the interest of their own economy (Hanlon & Heitzman, 2010).…”

“…Stable tax revenues are key to healthy development of national economy and people's livelihoods. However, government taxation reduces the cash flow needed for survival and growth of firms, thus increasing the economic pressure (Rego & Wilson, 2012;Wang & Wang, 2022).…”