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Public firms on an international border: A model of spatial price discrimination

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  • Heywood, John S.
  • Wang, Zheng

Abstract

This paper uniquely examines an international mixed oligopoly in a model of spatial price discrimination. It isolates the importance of the location of the border showing a variety of equilibria depending on the nationality and placement of the private rivals. While the presence of a public firm often improves domestic welfare, it need not. Moreover, a prisoner's dilemma can exist in which each country would benefit from the privatization of both public firms but neither country has a unilateral incentive to privatize. The implications are discussed.

Suggested Citation

  • Heywood, John S. & Wang, Zheng, 2024. "Public firms on an international border: A model of spatial price discrimination," Regional Science and Urban Economics, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:regeco:v:109:y:2024:i:c:s0166046224000851
    DOI: 10.1016/j.regsciurbeco.2024.104054
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    References listed on IDEAS

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    More about this item

    Keywords

    Public firms; Spatial price discrimination; International border;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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