Stackelberg mixed oligopoly with asymmetric subsidies

Vasileios Zikos

Economics Bulletin, 2007, vol. 12, issue 13, 1-5

Abstract: In a mixed oligopoly, when the public leader becomes a private leader and the government provides output subsidies, then privatization causes the optimal subsidy, profits and welfare to fall [Economics Letters 83 (2004) 411]. We show instead that if the leader and the followers receive asymmetric, rather than symmetric subsidies, the first-best optimum can be restored. In this case, privatization bears no consequences on the followers' subsidy, output and welfare.

JEL-codes: L0 L3 (search for similar items in EconPapers)
Date: 2007-06-21
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Citations: View citations in EconPapers (2)

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