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Title:Do consumers buy less of a taxed good? PDF Logo
Authors:Kind, Hans Jarle
Köthenbürger, Marko
Schjelderup, Guttorm
Issue Date:2005
Series/Report no.:CESifo working papers 1635
Abstract:This paper shows that consumers may buy more of a taxed good if it is sold by a two-sided platform firm. Two-sided platform industries serve distinct customer groups that are connected through interdependent demand, and include major businesses such as the media industry (newspapers/magazines and advertisers), banking (cardholder and merchant), and the software industry (users and application developers). The paper compares ad-valorem and specific taxes and shows that they may have opposite effects on quantities sold, and that the ad-valorem tax - the most commonly used tax throughout the OECD - has effects on prices and quantities not previously recognized.
Subjects:two-sided markets
ad-valorem taxes
specific taxes
JEL:L13
H22
H21
D43
D4
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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