Would Big Tobacco Have Been Better?: the Social Welfare Implications of Antitrust Action in the Presence of Negative Externalities.

This paper considers the role of antitrust action in markets with negative externalities and the social welfare consequences of the 1911 break-up of American Tobacco. A theoretical model shows that monopoly can be the preferred market structure in some cases. We provide rough estimates of the magnitude of the excise tax necessary to offset external costs in the cigarette industry and compare the estimates to current tax levels.

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Year of publication:	1999
Authors:	Gulbrandsen, E. ; Skeath, S.
Institutions:	Department of Economics, Wellesley College
Subject:	SOCIAL WELFARE \| TOBACCO \| TAXATION \| ANTITRUST LEGISLATION

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Series:	Wellesley College - Department of Economics.
Type of publication:	Book / Working Paper
Notes:	29 pages
Classification:	D62 - Externalities ; H23 - Externalities; Redistributive Effects ; Environmental Taxes and Subsidies ; L4 - Antitrust Policy ; L66 - Food; Beverages; Cosmetics; Tobacco
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005618851