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Optimal policy mix in an endogenous timing with a consumer-friendly public firm

Author

Listed:
  • Arturo Garcia

    (Technologico de Monterrey, Mexico)

  • Mariel Leal

    (Technologico de Monterrey, Mexico)

  • Sang-Ho Lee

    (Chonnam National University, South Korea)

Abstract

This study considers a mixed duopoly with a consumer-friendly public firm and analyzes an endogenous timing game in the presence of output subsidy and emission tax. We find that regardless of the policy mix, the equilibrium of endogenous market structure is determined by the public firm's concern on consumer surplus. We also show that the optimal policy mix can attain the first-best allocation for social welfare only when both firms have symmetric payoffs, which results in simultaneous-move outcome.

Suggested Citation

  • Arturo Garcia & Mariel Leal & Sang-Ho Lee, 2018. "Optimal policy mix in an endogenous timing with a consumer-friendly public firm," Economics Bulletin, AccessEcon, vol. 38(3), pages 1438-1445.
    • Handle: RePEc:ebl:ecbull:eb-18-00513
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I3-P135.pdf
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    References listed on IDEAS

    as
    1. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    2. Lee, Sang-Ho & Muminov, Timur K. & Tomaru, Yoshihiro, 2017. "Partial Privatization And Subsidization In A Mixed Duopoly: R&D Versus Output Subsidies," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 58(2), pages 163-177, December.
    3. Matsumura, Toshihiro & Okumura, Yasunori, 2013. "Privatization neutrality theorem revisited," Economics Letters, Elsevier, vol. 118(2), pages 324-326.
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    6. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    7. Sang-Ho Lee & Lili Xu, 2018. "Endogenous timing in private and mixed duopolies with emission taxes," Journal of Economics, Springer, vol. 124(2), pages 175-201, June.
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    13. Yoshihiro Tomaru & Kazuharu Kiyono, 2010. "Endogenous Timing in Mixed Duopoly with Increasing Marginal Costs," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(4), pages 591-613, December.
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    Cited by:

    1. Delbono, Flavio & Lanzi, Diego & Reggiani, Carlo, 2023. "Workers’ firm in mixed duopoly," Economic Modelling, Elsevier, vol. 122(C).
    2. Hao Xu & Ming Luo, 2022. "Optimal Environmental Policy in a Dynamic Transboundary Pollution Game: Emission Standards, Taxes, and Permit Trading," Sustainability, MDPI, vol. 14(15), pages 1-25, July.

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    More about this item

    Keywords

    endogenous timing game; consumer-friendly public firm; emission tax; output subsidy;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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