Public firms on an international border: A model of spatial price discrimination

John Heywood and Zheng Wang

Regional Science and Urban Economics, 2024, vol. 109, issue C

Abstract: This paper uniquely examines an international mixed oligopoly in a model of spatial price discrimination. It isolates the importance of the location of the border showing a variety of equilibria depending on the nationality and placement of the private rivals. While the presence of a public firm often improves domestic welfare, it need not. Moreover, a prisoner's dilemma can exist in which each country would benefit from the privatization of both public firms but neither country has a unilateral incentive to privatize. The implications are discussed.

Keywords: Public firms; Spatial price discrimination; International border (search for similar items in EconPapers)
JEL-codes: L13 L33 R32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:109:y:2024:i:c:s0166046224000851

DOI: 10.1016/j.regsciurbeco.2024.104054

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