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Public Firm in Mixed Oligopolistic Structure: A Theoretical Exposition

Author

Listed:
  • Chatterjee, Susmita
  • Chattopadhyay, Srobonti
  • Chatterjee, Rittwik
  • Dutta, Debabrata

Abstract

The logic for state monopoly of public utilities arises from increasing returns to scale and the concern that private business in these areas results in monopolistic exploitation of consumers. The state monopoly however is fraught with the danger of production inefficiency. In this backdrop, the market form of mixed oligopoly is contemplated in markets like health, education, electricity, gas, telecommunications etc, where public and private sector coexists. The private firms maximize profit but the public firm maximizes social welfare. Despite this theoretical exposition, it is often observed that public firms fail to make contributions according to their potentiality. The public firm in an industry with rapid change in technology can perform inefficiently due to decision making delay, adherence to social obligation. The policy makers must rise to these occasions then survival of public firms will be smooth. The option of public private partnership also derives affirmative results for the society and the particular industry per se.

Suggested Citation

  • Chatterjee, Susmita & Chattopadhyay, Srobonti & Chatterjee, Rittwik & Dutta, Debabrata, 2017. "Public Firm in Mixed Oligopolistic Structure: A Theoretical Exposition," MPRA Paper 80073, University Library of Munich, Germany, revised 15 May 2017.
    • Handle: RePEc:pra:mprapa:80073
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Public Firm; Public Private Partnership; Mixed Oligopoly;
    All these keywords.

    JEL classification:

    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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