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Privatization and government preference

Author

Listed:
  • Hideya Kato

    (Faculty of Economics, Nagoya Keizai University, 61-1, Uchikubo, Inuyama, Aichi, 484-8504, Japan)

Abstract

This paper uses a mixed oligopoly model to examine the relationship between the privatization of a public firm and government preferences for tax revenue. From a public choice viewpoint, we assume the government prefers tax revenue to the sum of consumer and producer surplus, whereas the public firm only cares about the sum of consumer and producer surplus. The results indicate that if the government sufficiently prefers tax revenue, it will not privatize the public firm.

Suggested Citation

  • Hideya Kato, 2008. "Privatization and government preference," Economics Bulletin, AccessEcon, vol. 12(40), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-08l30004
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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. de Fraja, Giovanni & Delbono, Flavio, 1990. "Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
    3. 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.
    4. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Choi, Kangsik, 2012. "Indirect Taxation and Privatization in a Model of Government's Preference," MPRA Paper 42968, University Library of Munich, Germany.
    2. Kojun Hamada, 2018. "Privatization Neutrality Theorem: When a Public Firm Pursues General Objectives," The Japanese Economic Review, Springer, vol. 69(1), pages 59-68, March.
    3. Choi, Kangsik, 2011. "Unions, government's preference, and privatization," Economic Modelling, Elsevier, vol. 28(6), pages 2502-2508.
    4. Toshihiro Matsumura & Yasunori Okumura, 2014. "Comparison between specific taxation and volume quotas in a free entry Cournot oligopoly," Journal of Economics, Springer, vol. 113(2), pages 125-132, October.
    5. Choi, Kangsik, 2013. "Unionized Mixed Oligopoly and Privatization with Excess Burden of Taxation," MPRA Paper 51156, University Library of Munich, Germany.
    6. Kangsik Choi & Yuanzhu Lu, 2009. "A Model Of Endogenous Payoff Motives And Endogenous Timing In A Mixed Duopoly," Australian Economic Papers, Wiley Blackwell, vol. 48(3), pages 203-223, September.
    7. Choi, Kangsik, 2009. "Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly," MPRA Paper 17221, University Library of Munich, Germany.
    8. Li, Mingzhi & Lien, Jaimie W. & Zheng, Jie, 2021. "Optimal subsidies in the competition between private and state-owned enterprises," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 1235-1244.
    9. Toshihiro Matsumura & Yoshihiro Tomaru, 2013. "Mixed duopoly, privatization, and subsidization with excess burden of taxation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(2), pages 526-554, May.
    10. Kangsik Choi, 2009. "Privatization and Government's Preference under Mixed Oligopoly: A Generalization," Economics Bulletin, AccessEcon, vol. 29(2), pages 861-866.

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    More about this item

    Keywords

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    JEL classification:

    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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