, Volume 8, Issue 2, pp 139-160
Date: 20 May 2006

Mixed Oligopoly and Environmental Policy

Rent the article at a discount

Rent now

* Final gross prices may vary according to local VAT.

Get Access


We show in this paper that when there are both public and private firms in product markets (a mixed oligopoly) the decision whether to privatize a public firm interacts with the environmental policy of governments. Therefore, the outcome of the decision whether to privatize a public firm may be different if the government internalizes the environmental damage than if the government ignores it. When the government sets a tax to protect the environment, the tax is lower in the mixed oligopoly than in the private one even though the environmental damage is greater. In the mixed oligopoly the marginal cost of the public firm is lower than the market price.