Strategic delegation in spatial price discrimination mixed duopoly; Nash is consistent at the presence of a public firm

Nickolas Michelacakis

MPRA Paper from University Library of Munich, Germany

Abstract: We consider a mixed ownership duopoly delegation model with spatial price discrimination and constant, albeit different, marginal production costs. In contrast to what holds true for a private duopoly, the Nash equilibrium, absent delegation, for a mixed duopoly with discriminatory pricing according to location is both consistent and socially optimal. We find that under Nash conjectures, in most cases, firm owners have a strong incentive to delegate location decisions to managers. In such cases, firms locate closer to each other. The intensity of the competition leads to lower prices, lower profits, for both firms, and increased surplus for the consumer.

Keywords: mixed duopoly; delegation; spatial competition; consistent conjectures; Nash equilibrium (search for similar items in EconPapers)
JEL-codes: D43 L13 L21 L22 R32 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-bec, nep-com, nep-gth, nep-ind, nep-isf and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/109011/1/MPRA_paper_109011.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:109011

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().