This model explores how the optimal tax policy changes by the government on traditional internet economy and the blockchain economy when political regime changed. Also, our model compares how social welfare varies before and after the blockchain economy or the government involves. After analyzing, we get several interesting findings, first, without government, blockchain economy makes no influences on the monopoly ability of traditional internet economy and social welfare maximized in Nash equilibrium. Second, when government implements tax policy on economies, a loss in social welfare exists if the government is more self-interest (less democratic). Third, pure blockchain economy only exists when the democratic level of a government is very low and the technical cost of running a traditional internet platform is very high. This is because, in the mixed economy, the independence of more-dictatorial government with traditional internet economy leads to non-subsidy tax policy for traditional internet platform with high technology costs, thus the participation constraint for traditional internet platform cannot be satisfied. And without traditional internet economy, more self-interested government prefers to implement exploitative tax policy on citizens in pure blockchain economy, thus leads to a loss in social welfare. Finally, we find that even though maximization of social welfare cannot be realized in pure blockchain economy, with government's tax policy, social welfare is generally higher after blockchain economy was introduced.
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