PARTIAL PRIVATIZATION IN A MIXED DUOPOLY WITH AN R&D RIVALRY
John Heywood and
Guangliang Ye
Bulletin of Economic Research, 2009, vol. 61, issue 2, 165-178
Abstract:
This paper is the first to examine the incentive for partial privatization in a mixed duopoly with R&D rivalry. We show that because mixed duopolies engage in more R&D, the optimal extent of privatization is unambiguously reduced. Yet, this reduction is often very modest. Adopting the extent of privatization that would be optimal if one ignored the R&D rivalry routinely results in greater welfare than retaining a fully public firm and ignoring partial privatization. Only when R&D has an extremely low cost would it be preferable to ignore partial privatization.
Date: 2009
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https://doi.org/10.1111/j.1467-8586.2008.00301.x
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Persistent link: https://EconPapers.repec.org/RePEc:bla:buecrs:v:61:y:2009:i:2:p:165-178
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