A public firm in a vertically linked price discriminating spatial duopoly

Hamid Beladi, Avik Chakrabarti () and Daniel Hollas

Economic Systems, 2016, vol. 40, issue 1, 59-63

Abstract: We show that, in a vertically linked duopoly where neither firm can produce all varieties demanded, spatial competition between a public and a private firm induces them to deviate from the socially optimal location. We identify specific conditions under which a change in the degree of privatization induces one firm to move toward, while the other moves away from the socially optimal location. There exists a critical level of privatization above (below) which the public and private firms will come close (drift apart) with a rise in the degree of privatization.

Keywords: Product differentiation; Spatial competition; Public firm; Price discrimination; Firm location (search for similar items in EconPapers)
JEL-codes: D4 L1 L4 R3 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:40:y:2016:i:1:p:59-63

DOI: 10.1016/j.ecosys.2015.09.003

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