Mixed duopoly in quantity competition under the optimal privatization rate

Kojun Hamada

Economics Bulletin, 2020, vol. 40, issue 1, 689-698

Abstract: This study examines a mixed duopoly in differentiated products in which a partially privatized firm and a private firm simultaneously or sequentially compete in quantity after the government sets the optimal degree of privatization for the partially privatized firm. Comparing the social welfare when the timing of decision making is different, we present the following results. First, social welfare in Cournot equilibrium is equal to that in the Stackelberg equilibrium when a partially privatized firm is the leader. Second, social welfare is the largest in the Stackelberg equilibrium when a partially privatized firm is the follower.

Keywords: mixed duopoly; partial privatization; quantity competition; Stackelberg equilibrium (search for similar items in EconPapers)
JEL-codes: L2 L3 (search for similar items in EconPapers)
Date: 2020-03-05
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Citations: View citations in EconPapers (1)

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