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Stackelberg mixed oligopoly with asymmetric subsidies

Author

Listed:
  • Vasileios Zikos

    (Loughborough University)

Abstract

In a mixed oligopoly, when the public leader becomes a private leader and the government provides output subsidies, then privatization causes the optimal subsidy, profits and welfare to fall [Economics Letters 83 (2004) 411]. We show instead that if the leader and the followers receive asymmetric, rather than symmetric subsidies, the first-best optimum can be restored. In this case, privatization bears no consequences on the followers' subsidy, output and welfare.

Suggested Citation

  • Vasileios Zikos, 2007. "Stackelberg mixed oligopoly with asymmetric subsidies," Economics Bulletin, AccessEcon, vol. 12(13), pages 1-5.
    • Handle: RePEc:ebl:ecbull:eb-07l00001
    as

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    File URL: http://www.accessecon.com/pubs/EB/2007/Volume12/EB-07L00001A.pdf
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    References listed on IDEAS

    as
    1. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    2. Joanna Poyago-Theotoky, 2001. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-5.
    3. de Fraja, Giovanni & Delbono, Flavio, 1990. "Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
    4. Fjell, Kenneth & Heywood, John S., 2004. "Mixed oligopoly, subsidization and the order of firm's moves: the relevance of privatization," Economics Letters, Elsevier, vol. 83(3), pages 411-416, June.
    5. Gareth Myles, 2002. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result for the general case," Economics Bulletin, AccessEcon, vol. 12(1), pages 1-6.
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    Cited by:

    1. Kojun Hamada, 2018. "Privatization Neutrality Theorem: When a Public Firm Pursues General Objectives," The Japanese Economic Review, Japanese Economic Association, vol. 69(1), pages 59-68, March.
    2. Pak-Sing Choi & Felix Munoz-Garcia, 2023. "Can more perishable products be welfare-improving?," Economics Bulletin, AccessEcon, vol. 43(2), pages 1088-1097.

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    More about this item

    JEL classification:

    • L0 - Industrial Organization - - General
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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