The endogenous objective function of a partially privatized firm: A Nash bargaining approach

Yoshio Kamijo and Yoshihiro Tomaru ()

Economic Modelling, 2014, vol. 39, issue C, 101-109

Abstract: We establish a model wherein a private firm competes with a partially privatized firm whose objective function is endogenously determined through bargaining between owners—the welfare-maximizing government and dividend-maximizing private shareholders. Many existing works on partial privatization have assumed that privatization increases the weight of profits in the partially privatized firm's objective, whereas it decreases the weight of welfare. However, our bargaining approach shows that this result can be reversed.

Keywords: Mixed duopoly; Partial privatization; Bargaining; Nash solution (search for similar items in EconPapers)
JEL-codes: C78 L13 L33 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:39:y:2014:i:c:p:101-109

DOI: 10.1016/j.econmod.2014.02.014

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