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The nexus of market concentration and privatization policy in mixed oligopoly

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  • Hsu, Su-Ying
  • Lo, Chu-Ping
  • Wu, Shih-Jye

Abstract

We analyze the nexus of privatization policy and market concentration ratio in a mixed oligopoly where one public enterprise competes against n private firms with asymmetric costs. It is shown that the nexus of privatization policy and market concentration ratio is highly sensitive to the curvature of the market demand. When the market demand is concave (convex) to the origin, a higher concentration ratio leads to a higher (smaller) degree of privatization; whereas in the case of linear demand, the privatization ratio is independent of market concentration ratio.

Suggested Citation

  • Hsu, Su-Ying & Lo, Chu-Ping & Wu, Shih-Jye, 2014. "The nexus of market concentration and privatization policy in mixed oligopoly," Economic Modelling, Elsevier, vol. 38(C), pages 196-203.
    • Handle: RePEc:eee:ecmode:v:38:y:2014:i:c:p:196-203
    DOI: 10.1016/j.econmod.2013.12.025
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    More about this item

    Keywords

    Privatization policy; Mixed oligopoly; Market concentration; Nonlinear demand;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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