Abstract
Deregulation of public enterprises and services by privatization is very fashionable nowadays. The aim of privatization is mainly to increase effectiveness, while the government itself likes to maximize its revenue at the occasion of the takeover. Most of these public enterprises show a shortage in investment while maintenance of a reasonable employment level in the new private firm is also strongly desirable, not to mention the ecological obligations imposed on the new private firm. It means that takeover bids have to face multiple non-transitive objectives and several parties interested in the issue even several decision makers. Traditionally the optimization of all these objectives are then judged upon case by case in a rather subjective way. Consequently there is a need for a more general and objective, not to say scientific, method which can compare several takeover bids for privatization optimizing multiple objectives sometimes with different units of measurement. With that purpose, the Privata model was developed. Privata takes into consideration upper limits, lower bounds, dominating and nondominating effects, ending up with a set of nondominated takeover bids, which are ranked by using the reference point theory based on the maximal criterion values. In this way objectivity and decreasing marginal utility are fully respected. A theoretical explanation is followed by a simulation on several takeover bids for a public enterprise given multiple objectives.
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Brauers, W.K. Privata: A model for privatization with multiple non-transitive objectives. Public Choice 85, 353–370 (1995). https://doi.org/10.1007/BF01048204
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DOI: https://doi.org/10.1007/BF01048204