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Cost reducing incentives in a mixed duopoly market

Author

Listed:
  • Hikaru Ogawa

    (Nagoya University)

  • Ming Hsin Lin

    (Nagoya University)

Abstract

This note studies the cost-reducing incentives in a mixed duopoly market. The result shows that while a profit-maximizing private firm carries out the cost-reducing investment, a social welfare-maximizing firm does not have an incentive to reduce its costs as long as the market share of the private firm is sufficiently large.

Suggested Citation

  • Hikaru Ogawa & Ming Hsin Lin, 2005. "Cost reducing incentives in a mixed duopoly market," Economics Bulletin, AccessEcon, vol. 12(6), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-04l10048
    as

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    References listed on IDEAS

    as
    1. Willner, Johan, 1994. "Welfare maximisation with endogenous average costs," International Journal of Industrial Organization, Elsevier, vol. 12(3), pages 373-386, September.
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    3. Toshihiro Matsumura & Noriaki Matsushima, 2004. "Endogenous Cost Differentials between Public and Private Enterprises: A Mixed Duopoly Approach," Economica, London School of Economics and Political Science, vol. 71(284), pages 671-688, November.
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    5. Poyago-Theotoky, Joanna, 1998. "R&D Competition in a Mixed Duopoly under Uncertainty and Easy Imitation," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 415-428, September.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Tomaru, Yoshihiro, 2007. "Privatization, productive efficiency and social welfare with a foreign competitor," Research in Economics, Elsevier, vol. 61(4), pages 224-232, December.
    2. Rupayan Pal, 2009. "Technology Adoption in a Differentiated Duopoly: Cournot versus Bertrand," Working Papers id:1941, eSocialSciences.
    3. Chris Y. Tung & Chun-Chieh Wang, 2014. "Cost Signals under Uncertain R&D Outcomes," Australian Economic Papers, Wiley Blackwell, vol. 53(3-4), pages 207-229, December.
    4. Levin, Mark (Левин, Марк) & Matrosova, K. (Матросова, К.), 2016. "Research, Modeling and Process Management Dissemination of Innovations in Socio-Economic Systems [Исследование, Моделирование И Управление Процессами Распространения Инноваций В Социально-Экономиче," Working Papers 1443, Russian Presidential Academy of National Economy and Public Administration.
    5. Juan Carlos Bárcena‐Ruiz & María Begoña Garzón, 2020. "Disclosure of R&D knowledge in a mixed duopoly," Manchester School, University of Manchester, vol. 88(4), pages 584-598, July.
    6. Pal, Rupayan, 2010. "Technology adoption in a differentiated duopoly: Cournot versus Bertrand," Research in Economics, Elsevier, vol. 64(2), pages 128-136, June.
    7. Maria José Gil-Moltó & Joanna Poyago-Theotoky & Vasileios Zikos, 2011. "R&D Subsidies, Spillovers, and Privatization in Mixed Markets," Southern Economic Journal, John Wiley & Sons, vol. 78(1), pages 233-255, July.
    8. Kadohognon Sylvain Ouattara, 2015. "Incentives to merge in asymmetric mixed oligopoly," Economics Bulletin, AccessEcon, vol. 35(2), pages 885-895.
    9. Basak, Debasmita & Wang, Leonard F.S., 2019. "Cournot vs. Bertrand in mixed markets with R&D," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 265-271.
    10. Tsai, Tsung-Hsiu & Wang, Chia-Chi & Chiou, Jiunn-Rong, 2016. "Can privatization be a catalyst for environmental R&D and result in a cleaner environment?," Resource and Energy Economics, Elsevier, vol. 43(C), pages 1-13.
    11. Ohnishi, Kazuhiro, 2018. "Inventory Holding and a Mixed Duopoly with a Foreign Joint-Stock Firm," MPRA Paper 88223, University Library of Munich, Germany.
    12. Yanfang Zhang & Weijun Zhong, 2015. "Are Public Firms Always Less Innovative than Private Firms?," The Japanese Economic Review, Japanese Economic Association, vol. 66(3), pages 393-407, September.
    13. Kadohognon S Ouattara, 2016. "How privatization affects the strategic choice of managerial incentives: the case of international mixed duopoly," Economics Bulletin, AccessEcon, vol. 36(2), pages 1038-1045.
    14. Sylvain Kadohognon Ouattara, 2011. "Incitations à fusionner dans un oligopole mixte asymétrique," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201126, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    15. Juan Carlos Bárcena-Ruiz, 2008. "Are the public firms more innovative than the private ones?," Prague Economic Papers, Prague University of Economics and Business, vol. 2008(2), pages 157-167.

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    More about this item

    Keywords

    cost-reducing innovation;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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