Cross Ownership Under Strategic Tax Policy

Can, Gökhan; Mukherjee, Arijit

Abstract

We provide a new reason for the consumer surplus and welfare raising cross ownership. We show that cross ownership reduces the tax rate, and increases consumer surplus and welfare under Cournot and Bertrand competition when the marginal social cost/benefit of public funds is less than unity. We further show that Cournot competition creates higher consumer surplus and welfare compared to Bertrand competition if the marginal social cost/benefit of public funds is less than unity, thus providing a new reason for the Cournot-Bertrand welfare reversal.

Citation

Can, G., & Mukherjee, A. (2024). Cross Ownership Under Strategic Tax Policy. The B.E. Journal of Economic Analysis & Policy, https://doi.org/10.1515/bejeap-2024-0051

• Journal Article Type: Letter
• Acceptance Date: Oct 14, 2024
• Online Publication Date: Nov 5, 2024
• Publication Date: Nov 5, 2024
• Deposit Date: Oct 25, 2024
• Publicly Available Date: Nov 6, 2025
• Journal: B.E. Journal of Economic Analysis & Policy
• Electronic ISSN: 1935-1682
• Publisher: De Gruyter
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1515/bejeap-2024-0051
• Keywords: Bertrand; Cournot; Cross ownership; Strategic tax policy
• Public URL: https://nottingham-repository.worktribe.com/output/40870336
• Publisher URL: https://www.degruyter.com/document/doi/10.1515/bejeap-2024-0051/html