Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result for the general case

Gareth Myles ()

Economics Bulletin, 2002, vol. 12, issue 1, 1-6

Abstract: It is proved that the irrelevance result of Poyago-Theotoky can be extended from the linear-quadratic case to general inverse demand and cost functions. Hence, as long as firms are profitable at the first-best, the optimal subsidy decentralizes it in mixed oligopoly irrespecitve of whether the public firm maximizes welfare or profit and moves simultaneously with private firms, or maximizes welfare and acts as a Stackelberg leader.

Keywords: first-best (search for similar items in EconPapers)
JEL-codes: H2 L1 (search for similar items in EconPapers)
Date: 2002-01-16
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Citations: View citations in EconPapers (51)

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