Privatization, entry and corporate social responsibility with consumer cognition

Jun Wen, Yu Diao, Leonard F. S. Wang and Ji Sun

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we formulate a mixed triopoly with product differentiation and consumer cognition in which a welfare-maximizing public firm and CSR-concerned private firms conduct quantities competition. The government decides the optimal degree of privatization of public firm. We find that the privatization degree of public firm is closely related to product differentiation and consumer cognition. When private firm enters, whether CSR efforts are made or not, the degree of privatization will be higher. Furthermore, if the public firm is the leader of the industry, government’s optimal choice of privatization is not to privatize. The total output level, consumer surplus and social welfare are lower than those of Cournot competitors.

Keywords: privatization; corporate social responsibility; mixed triopoly; consumer cognition (search for similar items in EconPapers)
JEL-codes: D43 L13 L21 L31 M14 (search for similar items in EconPapers)
Date: 2022-10-26
New Economics Papers: this item is included in nep-bec, nep-com, nep-gth, nep-ind and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:115169

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