On the Optimal Taxation of the Commons

Dynamic Games and Applications Seminar

Speaker: Hassan Benchekroun – McGill University, Canada

Webinar link
Webinar ID: 841 3695 9888
Passcode: 120834

We study efficiency-inducing taxation of common-pool resources in oligopoly. In contrast with the existing literature, we consider a novel tax scheme where the tax bill paid by a firm depends only on the current resource stock. The regulator does not need to have information about firmsè individual outputs. We establish two main results. First, effciency can be achieved by means of a less informationally demanding tax than the per unit tax usually considered in the literature. Second, the intuitive lessons obtained for a per unit tax may no longer be valid when the tax depends only on the resource stock.