Interregional mixed duopoly
We investigate an interregional mixed duopoly wherein a local public firm competes against a private firm. We employ a spatial model with price competition. The public firm is owned by the local government of the left half of the linear city called Region 1, and maximizes its welfare. We demonstrate that our two-stage game comprising location choice and price competition has two types of equilibria. In one equilibrium (E1), the local public firm locates in Region 1, and the private firm locates outside the region. In the other equilibrium (E2), both firms are located in Region 1. We find that although the two firms are closely located in E2, E2 payoff-dominates E1. Moreover, E2 is robust in the sense that the sequential choice of location adopts this equilibrium, regardless of whether the public firm is a leader or a follower.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tharakan, Joe & Thisse, Jacques-François, 2001.
"The Importance of Being Small. Or When Countries are Areas and not Points,"
CEPR Discussion Papers
2938, C.E.P.R. Discussion Papers.
- Tharakan, Joe & Thisse, Jacques-Francois, 2002. "The importance of being small. Or when countries are areas and not points," Regional Science and Urban Economics, Elsevier, vol. 32(3), pages 381-408, May.
- Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991.
"Mixed oligopoly with differentiated products,"
International Journal of Industrial Organization,
Elsevier, vol. 9(1), pages 43-53, March.
- Toshihiro Matsumura & Noriaki Matsushima, 2003. "Mixed Duopoly with Product Differentiation: Sequential Choice of Location," Australian Economic Papers, Wiley Blackwell, vol. 42(1), pages 18-34, 03.
- Juan Bárcena-Ruiz, 2007. "Endogenous Timing in a Mixed Duopoly: Price Competition," Journal of Economics, Springer, vol. 91(3), pages 263-272, July.
- de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-11, April.
- Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
- Barcena-Ruiz, Juan Carlos & Begona Garzon, Maria, 2005. "Economic integration and privatisation under diseconomies of scale," European Journal of Political Economy, Elsevier, vol. 21(1), pages 247-267, March.
- Toshihiro Matsumura & Noriaki Matsushima, 2004. "Endogenous Cost Differentials between Public and Private Enterprises: A Mixed Duopoly Approach," Economica, London School of Economics and Political Science, vol. 71(284), pages 671-688, November.
- Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
- Pal, Debashis, 1998. "Does Cournot competition yield spatial agglomeration?," Economics Letters, Elsevier, vol. 60(1), pages 49-53, July.
- Hamilton, J.H. & Slutsky, S.M., 1988.
"Endogenous Timing In Duopoly Games: Stackelberg Or Cournot Equilibria,"
88-4, Florida - College of Business Administration.
- Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
- Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, Southern Economic Association, vol. 65(2), pages 264-281, October.
- Kenneth Fjell & Debashis Pal, 1996. "A Mixed Oligopoly in the Presence of Foreign Private Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 737-43, August.
- Matsushima, Noriaki, 2001. "Cournot competition and spatial agglomeration revisited," Economics Letters, Elsevier, vol. 73(2), pages 175-177, November.
- Hikaru Ogawa & Yasuo Sanjo, 2007. "Location Of Public Firm In The Presence Of Multinational Firm: A Mixed Duopoly Approach ," Australian Economic Papers, Wiley Blackwell, vol. 46(2), pages 191-203, 06.
- Noriaki Matsushima & Toshihiro Matsumura, 2003. "Mixed oligopoly and spatial agglomeration," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 62-87, February.
- Juan Carlos Bárcena-Ruiz & María Begoña Garzón, 2005.
"International Trade and Strategic Privatization,"
Review of Development Economics,
Wiley Blackwell, vol. 9(4), pages 502-513, November.
- Matsushima, Noriaki & Matsumura, Toshihiro, 2006.
"Mixed oligopoly, foreign firms, and location choice,"
Regional Science and Urban Economics,
Elsevier, vol. 36(6), pages 753-772, November.
- Noriaki Matsushima & Toshihiro Matsumura, 2005. "Mixed Oligopoly, Foreign Firms, and Location Choice," Discussion Papers 2005-21, Kobe University, Graduate School of Business Administration.
- Ohsawa, Yoshiaki, 1999. "Cross-border shopping and commodity tax competition among governments," Regional Science and Urban Economics, Elsevier, vol. 29(1), pages 33-51, January.
- Toshihiro Matsumura & Takao Ohkawa & Daisuke Shimizu, 2005. "Partial Agglomeration or Dispersion in Spatial Cournot Competition," Southern Economic Journal, Southern Economic Association, vol. 72(1), pages 224–235, July.
When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:39:y:2009:i:2:p:233-242. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.