Price or quantity? The strategic choice of subsidized firms in a mixed duopoly
AbstractThis paper investigates the endogenous choice of the strategic variable, price or quantity, taken in a mixed duopoly by a public and a private firm prior to market competition. While Matsumura and Ogawa (2012) in a standard mixed duopoly find that price is the unique equilibrium, we show that, by introducing firm subsidization in the same setting, quantity can constitute a dominant strategy equilibrium.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 118 (2013)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/ecolet
Price competition; Quantity competition; Mixed market; Subsidy;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Price or Quantity in Tacit Collusion?,"
CIE Discussion Papers
2001-05, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
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- Marcella Scrimitore, 2012. "Quantity Competition vs. Price Competition under Optimal Subsidy in a Mixed Duopoly," EERI Research Paper Series EERI_RP_2012_15, Economics and Econometrics Research Institute (EERI), Brussels.
- White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
- Trishita Bhattacharjee & Rupayan Pal, 2013. "Price vs. Quantity in duopoly with strategic delegation: Role of network externalities," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-010, Indira Gandhi Institute of Development Research, Mumbai, India.
- Rupayan Pal, . "The Cournot-Bertrand profit differential: A Reversal result in network goods duopoly," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-014, Indira Gandhi Institute of Development Research, Mumbai, India.
- Alessandra Chirco & Caterina Colombo & Marcella Scrimitore, 2013. "Organizational Structure and the Choice of Price vs. Quantity in a Mixed Duopoly," Working Paper Series 27_13, The Rimini Centre for Economic Analysis.
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