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Pricing Strategies and Partial Privatization Policy Based on Complementary Competitive Market

Akio Kawasaki ()
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Akio Kawasaki: Oita University

Journal of Industry, Competition and Trade, 2022, vol. 22, issue 1, No 6, 99-123

Abstract: Abstract This study investigates pricing strategies and privatization policies by assuming an asymmetric mixed duopoly market for complementary services. In addition, this study examines how technology affects the relationship between the degree of privatization and the degree of complementarity. The main results are as follows: When discriminatory pricing is adopted, the relationship between the degree of complementarity and the optimal degree of privatization is a monotonically increasing shape for inefficiently decreasing returns to scale. For an efficient one or for a constant return to scale, its relationship is an inverse U-shape. When uniform pricing is adopted, the monotone relationship (the inverse U-shaped relationship) holds for the decreasing return to scale (constant return to scale). When the degree of complementarity is small (large), uniform pricing (discriminatory pricing) with partial privatization is socially preferable as a pricing strategy. These results suggest that industries providing complementary services need to adopt discriminatory pricing with partial privatization.

Keywords: Complementary goods; Discriminatory pricing; Multi-market competition; Partial privatization; Uniform pricing (search for similar items in EconPapers)
JEL-codes: L11 L13 L93 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10842-021-00375-3

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