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A mixed duopoly input market: uniform pricing versus spatial price discrimination

Author

Listed:
  • John S. Heywood

    (University of Wisconsin-Milwaukee)

  • Zerong Wang

    (Chinese Academy of Macroeconomic Research)

  • Guangliang Ye

    (Hainan University)

Abstract

We uniquely model an upstream mixed duopoly engaging in either uniform pricing or spatial price discrimination when facing a continuum of downstream firms. Uniform pricing generates higher welfare with a fully public firm. Uniform pricing generates greater optimal partial privatization except when the cost disadvantage of the public firm is large and downstream cost convexity is large. Similarly, welfare under optimal partial privatization is larger under uniform pricing except when the cost disadvantage of the public firm is relatively large and downstream cost convexity is large. Thus, the implications of the pricing scheme depend critically on the upstream and downstream cost structure and the ownership structure.

Suggested Citation

  • John S. Heywood & Zerong Wang & Guangliang Ye, 2025. "A mixed duopoly input market: uniform pricing versus spatial price discrimination," Journal of Economics, Springer, vol. 144(1), pages 59-84, January.
    • Handle: RePEc:kap:jeczfn:v:144:y:2025:i:1:d:10.1007_s00712-024-00883-w
    DOI: 10.1007/s00712-024-00883-w
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    References listed on IDEAS

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    1. Schmitz, Patrick W., 2021. "Optimal ownership of public goods under asymmetric information," Journal of Public Economics, Elsevier, vol. 198(C).
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    More about this item

    Keywords

    Mixed duopoly; Input market; Spatial price discrimination; Uniform pricing;
    All these keywords.

    JEL classification:

    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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