MARKET STRUCTURE, PRODUCTION EFFICIENCY, AND PRIVATIZATION

Ya-Po Yang, Shih-Jye Wu and Jin-Li Hu ()

Hitotsubashi Journal of Economics, 2014, vol. 55, issue 1, 89-108

Abstract: In order to analyze the optimal degree of privatizing an upstream public firm, this paper sets up a vertically related market that consists of an upstream mixed oligopoly with one public firm and m private firms and a downstream oligopoly with n private firms. The major findings of this paper are as follows: If the marginal production cost of input increases slowly (rapidly), then the optimal degree for privatizing a public upstream firm increases (decreases) with the number of downstream firms. If the marginal production cost of input increases moderately, then the optimal degree for privatizing the public upstream firm first increases and then decreases with the number of downstream firms. If the marginal production cost of input is constant, then the optimal degree for privatizing a public upstream firm always increases with the number of downstream firms.

Keywords: vertically related market upstream market; intermediate goods; mixed Oligopoly; privatization (search for similar items in EconPapers)
JEL-codes: L22 L33 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:55:y:2014:i:1:p:89-108

DOI: 10.15057/26818

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