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Endogenous Timing in Mixed Duopoly with Increasing Marginal Costs

Author

Listed:
  • Yoshihiro Tomaru
  • Kazuharu Kiyono

Abstract

This paper investigates the desirable roles of both public and private firms with increasing marginal costs in mixed duopoly. In contrast to Pal [1998] and Mat- sumura [2003a], who use the constant-marginal-cost model, we show that it is possible for each firm to prefer the role of either the leader or the follower. Furthermore, this paper analyzes the endogenization of the production timing of both types of firms by using the observable-delay game of Hamilton and Slutsky [1990]. We find that even with increasing marginal costs, we can obtain Pal's result - the two types of Stackelberg outcomes are in equilibrium.

Suggested Citation

  • Yoshihiro Tomaru & Kazuharu Kiyono, 2010. "Endogenous Timing in Mixed Duopoly with Increasing Marginal Costs," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(4), pages 591-613, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201012)166:4_591:etimdw_2.0.tx_2-a
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    Citations

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    Cited by:

    1. Hiroaki Ino & Toshihiro Matsumura, 2010. "What role should public enterprises play in free-entry markets?," Journal of Economics, Springer, vol. 101(3), pages 213-230, November.
    2. Lin, Ming Hsin, 2013. "Airport privatization in congested hub–spoke networks," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 51-67.
    3. Barna Bakó & Attila Tasnádi, 2017. "The Kreps-Scheinkman Game in Mixed Duopolies," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(4), pages 753-768, December.
    4. Hirose, Kosuke & Matsumura, Toshihiro, 2017. "Comparing Welfare and Profit in Quantity and Price Competition within Stackelberg Mixed Duopolies," MPRA Paper 77700, University Library of Munich, Germany.
    5. Xu, Lili & Lee, Sang-Ho & Wang, Leonard F.S., 2016. "Free trade agreements and privatization policy with an excess burden of taxation," Japan and the World Economy, Elsevier, vol. 37, pages 55-64.
    6. Lin, Ming Hsin & Matsumura, Toshihiro, 2017. "Optimal Privatization and Uniform Subsidy Policies: A Synthesis," MPRA Paper 77285, University Library of Munich, Germany.
    7. Scrimitore, Marcella, 2014. "Quantity competition vs. price competition under optimal subsidy in a mixed oligopoly," Economic Modelling, Elsevier, vol. 42(C), pages 166-176.
    8. Toshihiro Matsumura & Makoto Okamura, 2015. "Competition and privatization policies revisited: the payoff interdependence approach," Journal of Economics, Springer, vol. 116(2), pages 137-150, October.
    9. repec:kap:jincot:v:17:y:2017:i:4:d:10.1007_s10842-017-0248-1 is not listed on IDEAS
    10. Tamás Balogh & Attila Tasnádi, 2012. "Does timing of decisions in a mixed duopoly matter?," Journal of Economics, Springer, vol. 106(3), pages 233-249, July.
    11. Lee, Sang-Ho & Xu, Lili, 2017. "Endogenous timing in private and mixed duopolies with emission taxes," MPRA Paper 80342, University Library of Munich, Germany.
    12. Marcella Scrimitore, 2012. "Quantity Competition vs. Price Competition under Optimal Subsidy in a Mixed Duopoly," EERI Research Paper Series EERI_RP_2012_15, Economics and Econometrics Research Institute (EERI), Brussels.
    13. Daisuke Hirata & Toshihiro Matsumura, 2011. "Price leadership in a homogeneous product market," Journal of Economics, Springer, vol. 104(3), pages 199-217, November.
    14. Garcia, Arturo & Leal, Mariel & Lee, Sang-Ho, 2018. "Endogenous timing with a socially responsible firm," MPRA Paper 83968, University Library of Munich, Germany.
    15. Cho, Sumi & Lee, Sang-Ho, 2017. "Subsidization Policy on the Social Enterprise for the Underprivileged," MPRA Paper 84411, University Library of Munich, Germany.
    16. Toshihiro Matsumura & Akira Ogawa, 2017. "Inefficient but Robust Public Leadership," Journal of Industry, Competition and Trade, Springer, vol. 17(4), pages 387-398, December.

    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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