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Partial Privatization Policy and the R&D Risk Choice in a Mixed Duopoly Market


  • Mingqing Xing


This study investigates how the partial privatization on the public firm affects the R&D risk choice in a mixed duopoly market. It mainly finds that: (i) the partial privatization of the public firm leads to a decline in the optimal level of R&D risk chosen by the private (or public) firm, and the higher the degree of privatization the lower the optimal level of R&D risk; (ii) for the public firm, the partial privatization policy always causes the private optimum to be lower than the social optimum; (iii) for the private firm, whether the private optimum is higher or lower than the social optimum depends on the partial privatization level of the public firm. When the degree of privatization is small (large), the private optimum is higher (lower) than the social optimum.

Suggested Citation

  • Mingqing Xing, 2019. "Partial Privatization Policy and the R&D Risk Choice in a Mixed Duopoly Market," Manchester School, University of Manchester, vol. 87(1), pages 60-80, January.
  • Handle: RePEc:bla:manchs:v:87:y:2019:i:1:p:60-80

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