Mixed Oligopoly, Sequential Entry, And Spatial Price Discrimination
Abstract"This paper is the first to examine the welfare consequences of a public firm in a traditional model of spatial price discrimination. It demonstrates that when a private firm acts as a Stackelberg location leader, the presence of a public firm always improves welfare. Moreover, when three firms locate sequentially, the presence of a public firm improves social welfare unless it locates last. Thus, despite examining a variety of location timings, including simultaneous location, privatization never improves welfare and usually harms welfare. This conclusion differs from several currently in the literature in which privatization often improves welfare. "("JEL "L13, L32, L33, L52) Copyright (c) 2008 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 47 (2009)
Issue (Month): 3 (07)
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Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
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- Kangsik, Choi, 2012. "Cournot and Bertrand competition with asymmetric costs in a mixed duopoly revisited," MPRA Paper 37704, University Library of Munich, Germany, revised 28 Mar 2012.
- Matsumura, Toshihiro & Ogawa, Akira, 2014. "Inefficient but robust public leadership," MPRA Paper 56539, University Library of Munich, Germany.
- Takeshi Ebina & Toshihiro Matsumura & Daisuke Shimizu, 2009. "Mixed oligopoly and spatial agglomeration in quasi-linear city," Economics Bulletin, AccessEcon, vol. 29(4), pages 2722-2729.
- John Heywood & Guangliang Ye, 2013. "Sequential entry and merger in spatial price discrimination," The Annals of Regional Science, Springer, vol. 50(3), pages 841-859, June.
- Kangsik, Choi, 2011. "Cournot and Bertrand competition with asymmetric costs in a mixed duopoly," MPRA Paper 34100, University Library of Munich, Germany.
- Kress, Dominik & Pesch, Erwin, 2012. "Sequential competitive location on networks," European Journal of Operational Research, Elsevier, vol. 217(3), pages 483-499.
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