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Co-Production and Reversed Cream-Skimming in Quasi-markets




  • D. LANZI

    () (Department of Economics, Faculty of Economics, ALMA MATER STUDIORUM/University of Bologna, Italy)


In this paper, we provide a very simple model to shed light on the issue of managed competition in mixed quasi-markets (i.e. regulated markets in which social and for-profit firms coexist). In doing this, we consider the literature on mixed oligopolies as a reasonable reference point and try to enrich it with the idea of quasi-market. Firstly, our results show that social firms serve the relatively richer portion of the population. Only relatively poor consumers buy units of service from the profit-oriented firm. Secondly, the socially-preferable form of managed competition is to introduce co-production practices and, hence, to raise profit-oriented firm’s production costs. The diffusion of co-production paradigms ensures maximal service quality and eliminates mark-up from the market.

Suggested Citation

  • F. Delbono & D. Lanzi, 2012. "Co-Production and Reversed Cream-Skimming in Quasi-markets," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 120(2), pages 201-214.
  • Handle: RePEc:vep:journl:y:2012:v:120:i:2:p:201-214

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    References listed on IDEAS

    1. Aiyar, Shekhar & Dalgaard, Carl-Johan, 2009. "Accounting for productivity: Is it OK to assume that the world is Cobb-Douglas?," Journal of Macroeconomics, Elsevier, vol. 31(2), pages 290-303, June.
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    More about this item


    Quasi-Markets; Competition; Regulation; Mixed Oligopoly; Social Firm;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services


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