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Endogenous Timing in Mixed Duopoly with Increasing Marginal Costs

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  • Yoshihiro Tomaru
  • Kazuharu Kiyono

Abstract

This paper investigates the desirable roles of both public and private firms with increasing marginal costs in mixed duopoly. In contrast to Pal [1998] and Mat- sumura [2003a], who use the constant-marginal-cost model, we show that it is possible for each firm to prefer the role of either the leader or the follower. Furthermore, this paper analyzes the endogenization of the production timing of both types of firms by using the observable-delay game of Hamilton and Slutsky [1990]. We find that even with increasing marginal costs, we can obtain Pal's result - the two types of Stackelberg outcomes are in equilibrium.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 166 (2010)
Issue (Month): 4 (December)
Pages: 591-613

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201012)166:4_591:etimdw_2.0.tx_2-a

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Cited by:
  1. Hiroaki Ino & Toshihiro Matsumura, 2010. "What role should public enterprises play in free-entry markets?," Journal of Economics, Springer, Springer, vol. 101(3), pages 213-230, November.
  2. Daisuke Hirata & Toshihiro Matsumura, 2011. "Price leadership in a homogeneous product market," Journal of Economics, Springer, Springer, vol. 104(3), pages 199-217, November.
  3. Tamás Balogh & Attila Tasnádi, 2012. "Does timing of decisions in a mixed duopoly matter?," Journal of Economics, Springer, Springer, vol. 106(3), pages 233-249, July.
  4. 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.
  5. Bakó, Barna & Tasnádi, Attila, 2014. "The Kreps-Scheinkman game in mixed duopolies," Corvinus Economics Working Papers (CEWP) 2014/11, Corvinus University of Budapest.
  6. Matsumura, Toshihiro & Ogawa, Akira, 2014. "Inefficient but robust public leadership," MPRA Paper 56539, University Library of Munich, Germany.
  7. Lin, Ming Hsin, 2013. "Airport privatization in congested hub–spoke networks," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 51-67.

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