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Mixed Duopoly with Product Differentiation: Sequential Choice of Location

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  • Toshihiro Matsumura
  • Noriaki Matsushima

Abstract

We investigate the sequential choice of location in a mixed duopoly, where a welfare–maximising public firm competes against a profit–maximising private firm. We examine the desirable role of the public firm in a mixed market. We also consider the effect of price regulation. We find that the public firm should become the follower (leader) if a price regulation is (is not) imposed. We also find that neither price regulation nor privatisation of the public firm improves welfare.

Suggested Citation

  • Toshihiro Matsumura & Noriaki Matsushima, 2003. "Mixed Duopoly with Product Differentiation: Sequential Choice of Location," Australian Economic Papers, Wiley Blackwell, vol. 42(1), pages 18-34, March.
  • Handle: RePEc:bla:ausecp:v:42:y:2003:i:1:p:18-34
    DOI: 10.1111/1467-8454.00183
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