What role should public enterprises play in free-entry markets?

Hiroaki Ino and Toshihiro Matsumura

No 46, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: We investigate a desirable role of public enterprise in mixed oligopoly in free-entry markets. We compare the following three cases: (i) a public firm produces before private firms (public leadership), (ii) all firms produce simultaneously (Cournot), (iii) a public firm produces after private firms (private leadership). We find that private leadership is best and public leadership is worst, in contrast to the cases without entries and exits of private firms. We also investigate the welfare implication of privatization. We find that some important results shown by existing works do not hold under private leadership.

Keywords: free-entry market; Stackelberg; Cournot; mixed oligopoly; commitment (search for similar items in EconPapers)
JEL-codes: H42 L13 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2009-06, Revised 2009-06
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://192.218.163.163/RePEc/pdf/kgdp46.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: What role should public enterprises play in free-entry markets? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:46

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