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Endogenous Timing in a Mixed Duopoly: Wighted Welfare and Price Competition

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  • Sedano Hoyuelos, Máximo
  • Bárcena Ruiz, Juan Carlos

Abstract

In this paper we analyse the endogenous order of moves in a mixed duopoly for differentiated goods. Firms choose whether to set prices sequentially or simultaneously. The private firm maximises profits while the public firm maximises the weighted sum of the consumer and producer surpluses (wighted welfare). It is shown that the result obtained in equilibrium depends crucially on the weigth given to the consumer surplus in weighted welfare and on the degree to which goods are substitutes or complements. We also anlyse whether the equilibria obtained maximise the sum of the consumer and producer suspluses or not. Finally we study whether the nationality of the private firm influences the results.

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Bibliographic Info

Paper provided by Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I in its series IKERLANAK with number 2011-46.

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Date of creation: 2011
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Handle: RePEc:ehu:ikerla:201146

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Postal: Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Keywords: mixed duopoly; price competition; endogenous timing; weighted welfare;

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Cited by:
  1. Dong, Quan & Bárcena-Ruiz, Juan Carlos, 2014. "Corruption and decisions on opening up markets," Economic Modelling, Elsevier, vol. 36(C), pages 23-29.
  2. Matsumura, Toshihiro & Ogawa, Akira, 2014. "Inefficient but robust public leadership," MPRA Paper 56539, University Library of Munich, Germany.

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