Competition between Nonprofit and For-Profit Firms
This paper considers a nonprofit firm competing against a for-profit firm in a homogenous goods market. Given a stochastic demand function and an asymmetric tax schedule, we derive Cournot-Nash equilibrium allowing the nonprofit firm to have an altruistic preference toward consumer surplus or total surplus. The effects of the tax rate and the degree of altruistic preference on market equilibrium outcomes are analyzed thereof.
Volume (Year): 1 (2002)
Issue (Month): 3 (December)
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- Darius Lakdawalla & Tomas Philipson, 1998. "Nonprofit Production and Competition," NBER Working Papers 6377, National Bureau of Economic Research, Inc.
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