Strategic Privatization and Regulation Policy in Mixed Markets
Jean Hindriks () and
Denis Claude ()
The IUP Journal of Managerial Economics, 2006, vol. IV, issue 1, 7-26
In this article, the authors consider mixed oligopoly markets for differentiated goods, where private and public firms compete either in price or quantity. This is a study of the welfare effect of privatization— interpreted as partial strategic delegation of the public firm to a private manager with profit concern. It is shown that partial privatization improves welfare with ‘quantity competition’ when goods are substitutes; and with ‘price competition’ when goods are complements. However, full privatization (complete delegation to private manager) can never be optimal. It is also shown that a public firm can make more profit than a private firm in equilibrium, and that this possibility is more likely under quantity competition. With regard to market regulation policy, it is articulated that (i) public and private firms should be taxed in the same manner; and (ii) price regulation is better than quantity regulation.
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Working Paper: Strategic privatization and regulation policy in mixed markets (2005)
Working Paper: Strategic Privatization and Regulation Policy in Mixed Markets (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjme:v:04:y:2006:i:1:p:7-26
Access Statistics for this article
More articles in The IUP Journal of Managerial Economics from IUP Publications
Bibliographic data for series maintained by G R K Murty ().