Using a two-firm spatial competition model, the authors show that zero transport costs amplify tiny cost advantages and propose an ordinal, rank-based distance tax that stabilizes the market with less revenue loss than a physical-distance tax.
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Ordinal Tax To Sustain a Digital Economy
Using a two-firm spatial competition model, the authors show that zero transport costs amplify tiny cost advantages and propose an ordinal, rank-based distance tax that stabilizes the market with less revenue loss than a physical-distance tax.