The authors provide a broad overview of economic aspects of commodity taxation, focussing in particular on theory and on policy applications in OECD countries. Some major papers in public economics have discussed whether these taxes should be levied at a uniform rate, or whether different...

We show how an upstream firm, by using a price-dependent profit-sharing rule, can prevent destructive competition between downstream firms that produce relatively close substitutes. With this rule, the upstream firm induces the retailers to behave as if demand has become less price elastic. As a...