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Environmental awareness of the private firm and optimal privatization in a mixed duopoly

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  • Xia Wang
  • Tingting Tan
  • Mingqing Xing

Abstract

This study investigates the optimal privatization policy in a mixed duopoly where the private firm may have environmental awareness. It finds that if the marginal environmental damage is low (high), partial privatization is optimal and its optimal level increases (decreases) with the degree of the private firm's environmental awareness. However, if the marginal environmental damage is moderate, full nationalization or full privatization can be optimal and the optimal privatization level does not depend on the degree of the private firm's environmental awareness. This study highlights the role that environmental pollution and private firms' environmental awareness play in determining optimal privatization policy.

Suggested Citation

  • Xia Wang & Tingting Tan & Mingqing Xing, 2022. "Environmental awareness of the private firm and optimal privatization in a mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4055-4063, December.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:8:p:4055-4063
    DOI: 10.1002/mde.3646
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