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Privatization and Government's Preference under Mixed Oligopoly: A Generalization

Author

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  • Kangsik Choi

    () (Pusan National University)

Abstract

In this paper, we generalize Kato's (Economics Bulletin, 2008) model by allowing many private firms in the mixed oligopoly setting, rather than the mixed duopoly framework of Kato (2008). By introducing the government's preference for tax revenues into the theoretical framework of mixed oligopoly, we show that Kato's results are robust when there are many private firms. That is, as the number of private firms increases, both total output and the government's payoff in the mixed oligopoly are larger than those in the private oligopoly if and only the weight of the government's preferences on tax revenues increases and vice versa.

Suggested Citation

  • Kangsik Choi, 2009. "Privatization and Government's Preference under Mixed Oligopoly: A Generalization," Economics Bulletin, AccessEcon, vol. 29(2), pages 861-866.
  • Handle: RePEc:ebl:ecbull:eb-09-00040
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I2-P35.pdf
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    References listed on IDEAS

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    1. repec:ebl:ecbull:v:12:y:2008:i:28:p:1-10 is not listed on IDEAS
    2. repec:ebl:ecbull:v:12:y:2008:i:40:p:1-7 is not listed on IDEAS
    3. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    4. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, pages 473-483.
    5. Rudra Sensarma & Bibhas Saha, 2008. "The Distributive Role of Managerial Incentives in a Mixed Duopoly," Economics Bulletin, AccessEcon, vol. 12(28), pages 1-10.
    6. Mujumdar, Sudesh & Pal, Debashis, 1998. "Effects of indirect taxation in a mixed oligopoly," Economics Letters, Elsevier, vol. 58(2), pages 199-204, February.
    7. 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.
    8. repec:ebl:ecbull:v:12:y:2002:i:1:p:1-6 is not listed on IDEAS
    9. de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-311, April.
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Government's preference; social welfare; tax; privatization;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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