Abstract
A model of differentiated mixed oligopoly is developed to systematically discuss the welfare consequences of partial privatization of a public firm. We analytically derive the optimal degree of partial privatization not only in the short run with restricted entry but also in the long run with free entry. It is shown that the short-run optimal policy is non-monotonic in the degree of love of variety, while the optimal degree of privatization is monotonically increasing in the consumer's preference for variety in the long run.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Andersen S. P., de Palma A. and Thisse J. (1997). Privatization and Efficiency in a Differentiated Industry. European Economic Review 42: 1635–54
Barcena-Ruiz J. C. and Garzon M. B. (2003). Mixed Duopoly, Merger and Multiproduct Firms. Journal of Economics 80: 27–42
Chao C. and Yu E. S. H. (2006). Partial Privatization, Foreign Competition and Optimum Tariff. Review of International Economics 14: 87–92
Chang W. W. (2005). Optimal Trade and Privatization Policies in an International Duopoly with Cost Asymmetry. Journal of International Trade and Economic Development 14: 19–42
Corneo G. and Jeanne O. (1994). Oligopole Mixte dans un Marché Commun. Annales d'Economie et de Statistique 33: 73–90
Cremer H., Marchand M. and Thisse J. (1991). Mixed Oligopoly with Differentiated Products. International Journal of Industrial Organization 9: 43–53
Fjell K. and Pal D. (1996). A Mixed Oligopoly in the Presence of Foreign Private Firms. Canadian Journal of Economics 29: 737–43
Li C. (2006). Location Choice in a Mixed Oligopoly. Economic Modelling 23: 131–41
Matsumura T. (1998). Partial Privatization in Mixed Duopoly. Journal of Public Economics 70: 473–83
Matsumura T. (2003). Stackelberg Mixed Duopoly with a Foreign Competitor. Bulletin of Economic Research 55: 275–87
Matsumura T. and Kanda O. (2005). Mixed Oligopoly at Free Entry Markets. Journal of Economics 84: 27–48
Matsumura T. and Matsushima N. (2003). Mixed Duopoly with Product Differentiation: Sequential Choice of Location. Australian Economic Papers 42: 18–34
Matsumura T. and Matsushima N. (2004). Endogenous Cost Differentials between Public and Private Enterprises: a Mixed Duopoly Approach. Economica 71: 671–88
Matsushima N. and Matsumura T. (2003). Mixed Oligopoly and Spatial Agglomeration. Canadian Journal of Economics 36: 62–87
Matsushima N. and Matsumura T. (2006). Mixed Oligopoly, Foreign Firms and Location Choice. Regional Science and Urban Economics 36: 753–72
McCorriston S. and MacLaren D. (2005). The Trade Distorting Effect of State Trading Enterprises in Importing Countries. European Economic Review 49: 1693–1715
Ottaviano G. I. P., Tabuchi T. and Thisse J. (2002). Agglomeration and Trade Revisited. International Economic Review 43: 409–36
Pal D. and White M. D. (1998). Mixed Oligopoly, Privatization and Strategic Trade Policy. Southern Economic Journal 65: 264–81
Vives X. (2001). Oligopoly Pricing: Old Ideas and New Tools. MIT Press, Cambridge, MA
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Fujiwara, K. Partial Privatization in a Differentiated Mixed Oligopoly. J Econ 92, 51–65 (2007). https://doi.org/10.1007/s00712-007-0267-1
Received:
Revised:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00712-007-0267-1