The welfare impact of a managerial oligopoly with an altruistic firm
I analyse the welfare impact of a mixed market with a private or public firm that is characterised by wider objectives or altruism, in the presence of an agency problem. Contrary to some earlier findings, the total surplus turns out to be increasing in the degree of altruism. This impact is stronger than without an agency problem, despite more stringent conditions for the market to remain mixed. The altruistic firm is more cost efficient, and viable if the market can remain mixed. A competition policy that encourages entry may increase welfare, but its scope is reduced by higher altruism. Copyright Springer-Verlag 2013
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.:
- Fershtman, Chaim, 1990. "The Interdependence between Ownership Status and Market Structure: The Case of Privatization," Economica, London School of Economics and Political Science, vol. 57(227), pages 319-28, August.
- Corneo, Giacomo & Rob, Rafael, 2003.
"Working in public and private firms,"
Journal of Public Economics,
Elsevier, vol. 87(7-8), pages 1335-1352, August.
- Zhenhui Xu & Melissa Birch, 1999. "The Economic Performance of State-owned Enterprises in Argentina an Empirical Assessment," Review of Industrial Organization, Springer, vol. 14(4), pages 355-375, June.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Besley, Timothy J. & Ghatak, Maitreesh, 2004.
"Competition and Incentives with Motivated Agents,"
CEPR Discussion Papers
4641, C.E.P.R. Discussion Papers.
- Timothy Besley & Maitreesh Ghatak, 2003. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 2202, London School of Economics and Political Science, LSE Library.
- Tim Besley & Maitreesh Ghatak, 2005. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 928, London School of Economics and Political Science, LSE Library.
- Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
- Gianni De Fraja & Paola Valbonesi, 2009. "Mixed Oligopoly: Old and New," Discussion Papers in Economics 09/20, Department of Economics, University of Leicester.
- Johan Willner, 2006. "A Mixed Oligopoly Where Private Firms Survive Welfare Maximisation," Journal of Industry, Competition and Trade, Springer, vol. 6(3), pages 235-251, December.
- Tomas J. Philipson & Richard A. Posner, 2006.
"Antitrust in the Not-For-Profit Sector,"
NBER Working Papers
12132, National Bureau of Economic Research, Inc.
- John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, June.
- Jonathan HASKEL & Stefan SZYMANSKI, 1992. "A Bargaining Theory Of Privatisation," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 63(2), pages 207-227, 04.
- Cabral, Luis M B & Riordan, Michael H, 1997. "The Learning Curve, Predation, Antitrust, and Welfare," Journal of Industrial Economics, Wiley Blackwell, vol. 45(2), pages 155-69, June.
- Martin Stephen, 1993. "Endogenous Firm Efficiency in a Cournot Principal-Agent Model," Journal of Economic Theory, Elsevier, vol. 59(2), pages 445-450, April.
- N. Gregory Mankiw & Michael D. Whinston, 1986. "Free Entry and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 48-58, Spring.
- Johan Willner & Sonja Gronblom, 2009. "The impact of budget cuts and incentive wages on academic work," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(6), pages 673-689.
- John S. Heywood & Guangliang Ye, 2009. "Delegation in a mixed oligopoly: the case of multiple private firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 71-82.
- German Coloma, 2006. "Mergers and Acquisitions in Mixed-Oligopoly Markets," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 5(2), pages 147-159, August.
- De Fraja, Giovanni, 1993. "Productive efficiency in public and private firms," Journal of Public Economics, Elsevier, vol. 50(1), pages 15-30, January.
- repec:ebl:ecbull:v:12:y:2008:i:28:p:1-10 is not listed on IDEAS
- Gregory E. Goering, 2007. "The strategic use of managerial incentives in a non-profit firm mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 83-91.
- Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, vol. 30(2), pages 505-520, 09.
- Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-47, Supplemen.
- Rudra Sensarma & Bibhas Saha, 2008. "The Distributive Role of Managerial Incentives in a Mixed Duopoly," Economics Bulletin, AccessEcon, vol. 12(28), pages 1-10.
- Massimo Florio, 2006. "The Great Divestiture: Evaluating the Welfare Impact of the British Privatizations, 1979-1997," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562227, June.
- 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.
- Pint, Ellen M., 1991. "Nationalization vs. regulation of monopolies : The effects of ownership on efficiency," Journal of Public Economics, Elsevier, vol. 44(2), pages 131-164, March.
- Johan Willner & David Parker, 2007. "The Performance of Public and Private Enterprise under Conditions of Active and Passive Ownership and Competition and Monopoly," Journal of Economics, Springer, vol. 90(3), pages 221-253, April.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Dewenter, Kathryn L & Malatesta, Paul H, 1997. " Public Offerings of State-Owned and Privately-Owned Enterprises: An International Comparison," Journal of Finance, American Finance Association, vol. 52(4), pages 1659-79, September.
- Fershtman, Chaim & Judd, Kenneth L, 1987.
"Equilibrium Incentives in Oligopoly,"
American Economic Review,
American Economic Association, vol. 77(5), pages 927-40, December.
- Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
- Herr, Annika, 2009. "Product differentiation and welfare in a mixed duopoly with regulated prices: the case of a public and a private hospital," IWQW Discussion Paper Series 08/2009, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
- Willner, Johan, 2001. "Ownership, efficiency, and political interference," European Journal of Political Economy, Elsevier, vol. 17(4), pages 723-748, November.
- unknown, 1993. "Privatization in Europe: A comparison of approaches," Discussion Paper Serie A 376, University of Bonn, Germany.
- Sonja GR�NBLOM & Johan WILLNER, 2008. "Privatization And Liberalization: Costs And Benefits In The Presence Of Wage-Bargaining," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(1), pages 133-160, 03.
- Michael Raith, 2003. "Competition, Risk, and Managerial Incentives," American Economic Review, American Economic Association, vol. 93(4), pages 1425-1436, September.
- Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Willner, Johan, 1994. "Welfare maximisation with endogenous average costs," International Journal of Industrial Organization, Elsevier, vol. 12(3), pages 373-386, September.
When requesting a correction, please mention this item's handle: RePEc:kap:jeczfn:v:109:y:2013:i:2:p:97-115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.