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Competition between Nonprofit and For-Profit Firms

Author

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  • 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, School of Management Development, 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.
    2. Pauly, Mark V & Redisch, Michael, 1973. "The Not-For-Profit Hospital as a Physicians' Cooperative," American Economic Review, American Economic Association, vol. 63(1), pages 87-99, March.
    3. Elaine Silverman & Jonathan Skinner, 2001. "Are For-Profit Hospitals Really Different? Medicare Upcoding and Market Structure," NBER Working Papers 8133, National Bureau of Economic Research, Inc.
    4. Mark Duggan, 2000. "Hospital Market Structure and the Behavior of Not-for-Profit Hospitals: Evidence from Responses to California's Disproportionate Share Program," NBER Working Papers 7966, National Bureau of Economic Research, Inc.
    5. David M. Cutler & Jill R. Horwitz, 1998. "Converting Hospitals from Not-for-profit to For-profit Status," NBER Working Papers 6672, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Caichun Chai & Eilin Francis & Tiaojun Xiao, 2021. "Supply chain dynamics with assortative matching," Journal of Evolutionary Economics, Springer, vol. 31(1), pages 179-206, January.
    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. Lisa Planer-Friedrich & Marco Sahm, 2017. "Strategic Corporate Social Responsibility," CESifo Working Paper Series 6506, CESifo.
    4. 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.
    5. Michael Klien & Gerhard Streicher, 2021. "Ökonomische Wirkungen des gemeinnützigen Wohnbaus," WIFO Studies, WIFO, number 66962, March.
    6. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Strategic corporate social responsibility," BERG Working Paper Series 124, Bamberg University, Bamberg Economic Research Group.
    7. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Why Firms Should Care for All Consumers," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168257, Verein für Socialpolitik / German Economic Association.
    8. Yunus Emre Gürler & Sinan Ertemel & Matthias Finger & Muzaffer Eroğlu, 2024. "Legal and ownership unbundling in the Turkish natural gas market: A comparative analysis," Competition and Regulation in Network Industries, , vol. 25(1), pages 19-42, March.
    9. Saha, Souresh, 2014. "Firm's objective function and product and process R&D," Economic Modelling, Elsevier, vol. 36(C), pages 484-494.
    10. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    11. 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.
    12. 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.
    13. Michael Klien & Peter Huber & Peter Reschenhofer & Gerlinde Gutheil-Knopp-Kirchwald & Gerald Kössl, 2023. "Die preisdämpfende Wirkung des gemeinnützigen Wohnbaus," WIFO Studies, WIFO, number 69779, March.
    14. Lisa Planer-Friedrich & Marco Sahm, 2020. "Strategic corporate social responsibility, imperfect competition, and market concentration," Journal of Economics, Springer, vol. 129(1), pages 79-101, January.

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    More about this item

    Keywords

    nonprofit; asymmetric taxation; stochastic demand; Cournot-Nash equilibrium;
    All these keywords.

    JEL classification:

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

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