A mixed duopoly input market: uniform pricing versus spatial price discrimination

John Heywood, Zerong Wang and Guangliang Ye ()
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Zerong Wang: Chinese Academy of Macroeconomic Research
Guangliang Ye: Hainan University

Journal of Economics, 2025, vol. 144, issue 1, No 3, 59-84

Abstract: Abstract We uniquely model an upstream mixed duopoly engaging in either uniform pricing or spatial price discrimination when facing a continuum of downstream firms. Uniform pricing generates higher welfare with a fully public firm. Uniform pricing generates greater optimal partial privatization except when the cost disadvantage of the public firm is large and downstream cost convexity is large. Similarly, welfare under optimal partial privatization is larger under uniform pricing except when the cost disadvantage of the public firm is relatively large and downstream cost convexity is large. Thus, the implications of the pricing scheme depend critically on the upstream and downstream cost structure and the ownership structure.

Keywords: Mixed duopoly; Input market; Spatial price discrimination; Uniform pricing (search for similar items in EconPapers)
JEL-codes: H44 L13 L32 L52 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:144:y:2025:i:1:d:10.1007_s00712-024-00883-w

DOI: 10.1007/s00712-024-00883-w

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