Capacity Choice in a Mixed Duopoly under Price Competition

Juan Bárcena-Ruiz and María Begoña Garzón ()
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María Begoña Garzón: Universidad del País Vasco

Economics Bulletin, 2007, vol. 12, issue 26, 1-7

Abstract: This paper shows that when firms compete on prices in a mixed duopoly, the public firm chooses over-capacity when products are substitutes and under-capacity when products are complements. The private firm always chooses under-capacity. This result is in contrast with that obtained in the literature assuming quantity competition.

Keywords: Heterogeneous; Products (search for similar items in EconPapers)
JEL-codes: D4 L3 (search for similar items in EconPapers)
Date: 2007-10-17
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-07l30004

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