Contingent claims analysis provides a useful tool for analysing the value of tax claims, and of companies' after-tax values, under uncertainty. The method is presented and applied to the analysis of how Norwegian petroleum taxes affect company behaviour. Few results can be derived analytically. A numerical approach is suggested, with a stylized description of production possibilities. The Norwegian taxes are found to have strong distortionary effects. The relation to other methods and problems connected with the application are discussed. © 1992.
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