Pass-through and tax incidence in Cournot duopoly with loan commitment

We adopt differentiated Cournot oligopolies analyzing how the loan commitment affects the pass-through rates and tax incidence. We integrate the product market, financial market, and fiscal policy to address the important issues of cost pass-through and tax incidence. We emphasize that the linkage with the financial market plays an important role in analyzing tax pass-through and tax incidence, result amplifies the relative difference of pass-through and tax incidences between the ad valorem and the specific tax. In addition, the contract of managerial delegation increases the pass-through and tax incidence rate of specific tax and ad valorem tax.