The Expected Discounted Tax Payments on Dual Risk Model under a Dividend Threshold*

Copyright © 2013 Zhang Liu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. In this paper, we consider the dual risk model in which periodic taxation are paid according to a loss-carry-forward sys-tem and dividends are paid under a threshold strategy. We give an analytical approach to derive the expression of gδ(u) (i.e. the Laplace transform of the first upper exit time). We discuss the expected discounted tax payments for this model and obtain its corresponding integro-differential equations. Finally, for Erlang (2) inter-innovation distribution, closed-form expressions for the expected discounted tax payments are given