 Bertrand versus Cournot competition in a downstream mixed oligopoly with foreign ownershipKi-Dong Lee, Sunghee Choi () and Kangsik Choi Bulletin of Economic Research, 2020, vol. 72, issue 2, 101-120 Abstract: Focusing on foreign ownership in the private firm, we examine the Cournot‐Bertrand comparison in a mixed oligopolistic market with vertical market structure. We have found that if public and private firms were charged with uniform price for their inputs, then Cournot‐Bertrand ranking in market outcomes confirms those obtained by Ghosh and Mitra (2010). This implies that under uniform pricing in the upstream sector, the vertical market structure does not have substantial influences on Cournot‐Bertrand ranking. However, if discriminatory pricing is adopted, firm's profits, output, and social welfare are often reversed to those obtained from uniform pricing in the upstream sector. Given the closeness of products, if the share of foreign ownership is sufficiently low, social welfare in Cournot competition can exceed that of Bertrand competition, contrasting with the standard welfare ranking that Bertrand welfare is strictly higher than Cournot. This implies that Cournot competition can be more socially desirable than Bertrand in mixed oligopoly with vertical market structure if discriminatory pricing scheme is adopted by foreign upstream monopolists. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:buecrs:v:72:y:2020:i:2:p:101-120 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in Bulletin of Economic Research from Wiley Blackwell |
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