A Simple Model Of Private Firms In A Centrally Planned Economy

Daniel Berkowitz

No 292710, SSRI Workshop Series from University of Wisconsin-Madison, Social Systems Research Institute

Abstract: This paper models the behavior of private firms in a parallel consumer goods market. The state sector is characterized by a fixed quantity, quality and price of output while the private sector strategically chooses its quality and quantity. The private sector response to a marginal cut-back in state provision of consumer goods is analyzed for the possible regimes of an excess-demand equilibrium. It is shown that this cut-back, unaccompanied by transfers of assets or materials to the private sector, may increase public welfare.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Pages: 29
Date: 1991-08
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Related works:
Working Paper: A Simple Model of Private Firms in a Centrally Planned Economy (1991)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwssri:292710

DOI: 10.22004/ag.econ.292710

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