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An Empirical Study of a Mathematical Model for Influence of Government Tax on the Price Behavior and the Stability of Market Price

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  • Fenglian Wang
  • Chia-Huei Wu
  • Sang-Bing Tsai

Abstract

The fierce competition among enterprises and disordered market price competition have affected the development of the whole regional economy. Government tax subsidies have always been regarded as the advantages of enterprise development, but the mechanism of the influence of government tax on regional economic development, especially the impact on market price, has not been explored. Based on the Bertrand competition, applying chaos control theory, considering the government revenue rate, the influence of government tax on the price behavior and market price stability is analyzed, and then the numerical simulation is carried out. The research shows that the price adjustment of enterprises is a complicated process and government tax is helpful to the stability of market price. The government tax rate increasing can increase the stable region of price equilibrium and reduce the bifurcation and chaos of the price game system.

Suggested Citation

  • Fenglian Wang & Chia-Huei Wu & Sang-Bing Tsai, 2020. "An Empirical Study of a Mathematical Model for Influence of Government Tax on the Price Behavior and the Stability of Market Price," Mathematical Problems in Engineering, Hindawi, vol. 2020, pages 1-9, September.
    • Handle: RePEc:hin:jnlmpe:8097402
    DOI: 10.1155/2020/8097402
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    Cited by:

    1. Nálepová, Veronika & Lampart, Marek, 2024. "Impact of windfall tax on market dynamics: A Cournot oligopoly model with exogenous shocks," Economic Modelling, Elsevier, vol. 137(C).

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