Co-Production and Managed Competition in Mixed Quasi-markets

Flavio Delbono and Diego Lanzi

No 82-2011, AICCON Working Papers from Associazione Italiana per la Cultura della Cooperazione e del Non Profit

Abstract: In this paper, we provide a very simple model to shed light on the issue of managed competition in mixed quasi-markets (i.e. regulated markets in which social and for-profit firms coexist). In doing this, we consider the literature on mixed oligopolies as a reasonable reference point and try to enrich it with the idea of quasi-market. Firstly, our results show that social firms serve the relatively richer portion of the population. Only relatively poor consumers buy units of service from the profit-oriented firrm's production costs. Secondly, the socially-preferable form of managed competition is to introduce coproduction practices and, hence, to raise profit-oriented firm’s production costs. The diffusion of coproduction paradigms ensures maximal service quality and eliminates mark-up from the market.

Keywords: QUASI-MARKETS; COMPETITION; REGULATION; MIXED OLIGOPOLY; SOCIAL FIRM (search for similar items in EconPapers)
JEL-codes: I18 L13 L84 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2011-02-10
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Working Paper: Co-Production and Managed Competition in Mixed Quasi-markets (2011)
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