Market transparency in a mixed oligopoly

Lili Xu and Toshihiro Matsumura

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the relationship between market transparency and economic welfare in a mixed duopoly in which a welfare-maximizing public firm competes with a profit-maximizing private firm. We find that the private firm’s market share, consumer surplus, and welfare increase with market transparency. Further, the relationship between the private firm’s profit and market transparency has an inverted U shape. This result suggests that profit-maximizing firms may have incentives to improve market transparency, especially when the degree of market transparency is low, which is in sharp contrast to the results under a private duopoly.

Keywords: market transparency; mixed oligopoly; product differentiation; unconstrained Hotelling model; profit-enhancing market transparency; crowding out (search for similar items in EconPapers)
JEL-codes: L13 L15 L32 L33 (search for similar items in EconPapers)
Date: 2023-08-29
New Economics Papers: this item is included in nep-bec, nep-com, nep-gth, nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:118415

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