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Mixed Oligopoly and Environmental Policy

  • Juan Bárcena-Ruiz


  • María Garzón


The literature on mixed oligopoly does not consider the role that the environmental policy of the government plays on the decision whether to privatize public firms. Assuming that there are one public firm and n private firms and that the government chooses an environmental standard we show that, when the number of private firms is low enough, the public firm is privatized if it is inefficient enough. When the number of private firms is high enough, the government always privatizes the public firm. We also show that the range of values of the parameters for which the government privatizes the public firm is greater than when environmental policy is not considered.

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Article provided by Springer in its journal Spanish Economic Review.

Volume (Year): 8 (2006)
Issue (Month): 2 (June)
Pages: 139-160

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Handle: RePEc:spr:specre:v:8:y:2006:i:2:p:139-160
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  1. Juan Bárcena-ruiz & María Garzón, 2003. "Strategic Environmental Standards, Wage Incomes and the Location of Polluting Firms," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(2), pages 121-139, February.
  2. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
  3. Markusen, James R. & Morey, Edward R. & Olewiler, Nancy, 1995. "Competition in regional environmental policies when plant locations are endogenous," Journal of Public Economics, Elsevier, vol. 56(1), pages 55-77, January.
  4. 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.
  5. Markusen, James R., 1997. "Costly pollution abatement, competitiveness and plant location decisions," Resource and Energy Economics, Elsevier, vol. 19(4), pages 299-320, November.
  6. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-41, December.
  7. Barrett, Scott, 1994. "Strategic environmental policy and intrenational trade," Journal of Public Economics, Elsevier, vol. 54(3), pages 325-338, July.
  8. Barros, Fatima, 1995. "Incentive schemes as strategic variables: An application to a mixed duopoly," International Journal of Industrial Organization, Elsevier, vol. 13(3), pages 373-386, September.
  9. Kenneth Fjell & Debashis Pal, 1996. "A Mixed Oligopoly in the Presence of Foreign Private Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 737-43, August.
  10. Ulph, Alistair, 1996. "Environmental Policy and International Trade when Governments and Producers Act Strategically," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 265-281, May.
  11. Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-59, June.
  12. Misiolek, Walter S., 1980. "Effluent taxation in monopoly markets," Journal of Environmental Economics and Management, Elsevier, vol. 7(2), pages 103-107, June.
  13. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. " The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-52, June.
  14. de Fraja, Giovanni & Delbono, Flavio, 1990. " Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
  15. Falk Ita & Mendelsohn Robert, 1993. "The Economics of Controlling Stock Pollutants: An Efficient Strategy for Greenhouse Gases," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 76-88, July.
  16. Barcena-Ruiz, Juan Carlos & Begona Garzon, Maria, 2005. "Economic integration and privatisation under diseconomies of scale," European Journal of Political Economy, Elsevier, vol. 21(1), pages 247-267, March.
  17. Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
  18. Estrin, Saul & de Meza, David, 1995. "Unnatural monopoly," Journal of Public Economics, Elsevier, vol. 57(3), pages 471-488, July.
  19. Vining, Aidan R & Boardman, Anthony E, 1992. " Ownership versus Competition: Efficiency in Public Enterprise," Public Choice, Springer, vol. 73(2), pages 205-39, March.
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