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Competition between Nonprofit and For-Profit Firms

Author

Listed:
  • Donald Lien

    (Department of Economics, University of Texas at San Antonio, U.S.A.)

Abstract

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.

Suggested Citation

  • Donald Lien, 2002. "Competition between Nonprofit and For-Profit Firms," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(3), pages 193-207, December.
  • Handle: RePEc:ijb:journl:v:1:y:2002:i:3:p:193-207
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    References listed on IDEAS

    as
    1. Darius Lakdawalla & Tomas Philipson, 1998. "Nonprofit Production and Competition," NBER Working Papers 6377, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Saha, Souresh, 2014. "Firm's objective function and product and process R&D," Economic Modelling, Elsevier, vol. 36(C), pages 484-494.
    2. Kopel, Michael & Lamantia, Fabio & Szidarovszky, Ferenc, 2014. "Evolutionary competition in a mixed market with socially concerned firms," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 394-409.
    3. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    4. Lisa Planer-Friedrich & Marco Sahm, 2017. "Strategic Corporate Social Responsibility," CESifo Working Paper Series 6506, CESifo Group Munich.
    5. Nakamura, Yasuhiko, 2014. "Capacity choice in a duopoly with a consumer-friendly firm and an absolute profit-maximizing firm," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 105-117.
    6. Flores, Daniel & García, Arturo, 2016. "On the output and welfare effects of a non-profit firm in a mixed duopoly: A generalization," Economic Systems, Elsevier, vol. 40(4), pages 631-637.
    7. Panda, Shibaji, 2014. "Coordination of a socially responsible supply chain using revenue sharing contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 92-104.
    8. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Strategic corporate social responsibility," BERG Working Paper Series 124, Bamberg University, Bamberg Economic Research Group.
    9. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Why Firms Should Care for All Consumers," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168257, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    nonprofit; asymmetric taxation; stochastic demand; Cournot-Nash equilibrium;

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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