IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-04159754.html

Public vs. Private Investments In Network Industries

Author

Listed:
  • Jean-Marc Zogheib

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Marc Bourreau

Abstract

We study the competition between a private firm and public firms on prices and investment in new infrastructures. While the private firm maximizes its profits, public firms maximize the sum of their profits and consumer surplus, subject to a budget constraint. We consider two scenarios of public intervention, with a national public firm and with local public firms. In a monopoly benchmark, we find that the national public firm has the highest coverage and charges a uniform price allowing cross-subsidies between high-cost and low-cost areas. Moreover, the private firm covers as much as local public firms. In a mixed duopoly, a stronger competitive pressure drives firms' prices up while it drives down (up) the national public (private) firm's coverage.

Suggested Citation

  • Jean-Marc Zogheib & Marc Bourreau, 2021. "Public vs. Private Investments In Network Industries," Working Papers hal-04159754, HAL.
    • Handle: RePEc:hal:wpaper:hal-04159754
    Note: View the original document on HAL open archive server: https://hal.science/hal-04159754
    as

    Download full text from publisher

    File URL: https://hal.science/hal-04159754/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-04159754. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.