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Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition

Alessandra Chirco () and Marcella Scrimitore ()

No EERI RP 2017/06, EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: By developing a linear model in a two-country framework of international price competition, we show how the degree of product differentiation and the cross-country distribution of private firms affect the strategic privatization choices made by governments concerned with their own country’s welfare. More particularly, the work points out that sufficiently low product differentiation may lead public ownership to be optimally chosen to restrict competition in the country with the larger number of firms, and privatization to be global welfare enhancing in this case.

Keywords: Mixed oligopoly; price competition; strategic privatization; international markets. (search for similar items in EconPapers)
JEL-codes: F23 L13 L32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2017-05-06
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