A timing game in a mixed duopoly

Chia-Hung Sun ()
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Chia-Hung Sun: Soochow University

SERIEs: Journal of the Spanish Economic Association, 2024, vol. 15, issue 1, No 4, 127-144

Abstract: Abstract This paper investigates a timing game in a mixed duopoly, whereby a relatively inefficient state-owned firm maximizing the linear combination of its profit and social welfare competes against a relatively efficient, profit-maximizing private firm over the timing of entry. We find that the incentives for firms to enter the market depend on the degrees of privatization of a state-owned firm and of the cost asymmetry between the two firms. We also provide welfare analysis by comparing the equilibrium timing of entry with the socially optimal one. When the two firms’ products are perfect substitutes, the socially optimal timing of both firms entering the market can be achieved if the state-owned firm is fully public.

Keywords: Mixed duopoly; Timing game; Precommitment game; Privatization policy (search for similar items in EconPapers)
JEL-codes: D21 L13 O30 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13209-023-00285-z

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