This paper analyzes time-consistent subsidies in industries with strong learning effects and frequent entry and exit. Structural dynamics create opportunities for strategic behavior: by influencing government policies, infant firms can reduce their tax burden and weaken future competitors. Two...

This paper studies implementation of the social optimum in a model of habit formation. We consider taxes that address inefciencies due to negative consumption externalities, imperfect competition, and self-control problems. Our contributions are to: i) account for producers market power; and ii)...