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Private provision of price excludable public goods by rivals

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  • Heywood, John S.
  • Li, Dongyang
  • Ye, Guangliang

Abstract

We uniquely study the private provision of price excludable public goods in a duopoly. Simultaneous price competition generates only a mixed strategy equilibrium. Price leadership generates a pure strategy equilibrium with the leader setting a lower price and serving most consumers. This leadership game is the endogenous timing choice and improves welfare relative to monopoly provision. We re-examine these results under production in advance. The leadership game no longer remains a unique timing choice but the profit under production in advance is strictly larger.

Suggested Citation

  • Heywood, John S. & Li, Dongyang & Ye, Guangliang, 2023. "Private provision of price excludable public goods by rivals," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 291-307.
    • Handle: RePEc:eee:jeborg:v:214:y:2023:i:c:p:291-307
    DOI: 10.1016/j.jebo.2023.08.013
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    More about this item

    Keywords

    Non-rivalrous consumption; Public goods; Duopoly; Production to order; Production in advance;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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