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On The Robustness Of Private Leadership In Mixed Duopoly

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  • TOSHIHIRO MATSUMURA
  • AKIRA OGAWA

Abstract

We investigate a mixed duopoly where a state‐owned public enterprise competes against a profit‐maximising private enterprise. We analyse whether private leadership or public leadership is robust in the observable delay game. We find that private leadership is always risk dominant. We also investigate how ownership structure in a public firm affects the equilibrium distribution of roles. We find that the roles are as follows: (1) Cournot, when the degree of privatisation is low, (2) private leadership, when it is middle, (3) both private leadership and public leadership, when it is high. The result implies that private leadership is again more robust.

Suggested Citation

  • Toshihiro Matsumura & Akira Ogawa, 2010. "On The Robustness Of Private Leadership In Mixed Duopoly," Australian Economic Papers, Wiley Blackwell, vol. 49(2), pages 149-160, June.
  • Handle: RePEc:bla:ausecp:v:49:y:2010:i:2:p:149-160
    DOI: 10.1111/j.1467-8454.2010.00393.x
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