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Stackelberg mixed oligopoly with asymmetric subsidies

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Author Info
Vasileios Zikos () (Loughborough University)

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Abstract

In a mixed oligopoly, when the public leader becomes a private leader and the government provides output subsidies, then privatization causes the optimal subsidy, profits and welfare to fall [Economics Letters 83 (2004) 411]. We show instead that if the leader and the followers receive asymmetric, rather than symmetric subsidies, the first-best optimum can be restored. In this case, privatization bears no consequences on the followers' subsidy, output and welfare.

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File URL: http://economicsbulletin.vanderbilt.edu/2007/volume12/EB-07L00001A.pdf
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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 12 (2007)
Issue (Month): 13 ()
Pages: 1-5
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:v:12:y:2007:i:13:p:1-5

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Related research
Keywords: asymmetric subsidies; Mixed oligopoly; privatization;

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Find related papers by JEL classification:
L0 - Industrial Organization - - General
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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  1. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991. "Mixed oligopoly with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 43-53, March. [Downloadable!] (restricted)
  2. Joanna Poyago-Theotoky, 2001. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result," Economics Bulletin, Economics Bulletin, vol. 12, pages 1-5. [Downloadable!]
  3. de Fraja, Giovanni & Delbono, Flavio, 1990. " Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Blackwell Publishing, vol. 4(1), pages 1-17.
  4. Fjell, Kenneth & Heywood, John S., 2004. "Mixed oligopoly, subsidization and the order of firm's moves: the relevance of privatization," Economics Letters, Elsevier, vol. 83(3), pages 411-416, June. [Downloadable!] (restricted)
  5. de Palma, André & Thisse, Jacques-François, 1995. "Privatization and Efficiency in a Differentiated Industry," CEPR Discussion Papers 1136, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Gareth Myles, 2002. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result for the general case," Economics Bulletin, Economics Bulletin, vol. 12, pages 1-6. [Downloadable!]
  7. de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-11, April. [Downloadable!] (restricted)
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