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Necessarily welfare-improving privatization

Author

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  • Kenji Fujiwara

    (School of Economics, Kwansei Gakuin University)

Abstract

This paper examines the welfare effect of privatization in a mixed oligopoly model where multiple oligopolistic industries compete for a common factor. We find that privatization necessarily improves welfare in a benchmark case with symmetric costs across all oligopolistic industries. Moreover, we show that a production subsidy necessarily reduces welfare regardless of the level of privatization.

Suggested Citation

  • Kenji Fujiwara, 2015. "Necessarily welfare-improving privatization," Discussion Paper Series 130, School of Economics, Kwansei Gakuin University, revised Jul 2015.
    • Handle: RePEc:kgu:wpaper:130
    as

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    File URL: http://192.218.163.163/RePEc/pdf/kgdp130.pdf
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    References listed on IDEAS

    as
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    3. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    4. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
    5. Rudy Colacicco, 2015. "Ten Years Of General Oligopolistic Equilibrium: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 965-992, December.
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    7. Matsumura, Toshihiro & Okumura, Yasunori, 2013. "Privatization neutrality theorem revisited," Economics Letters, Elsevier, vol. 118(2), pages 324-326.
    8. Jiang, Yi & Peng, Mike W. & Yang, Xiaohua & Mutlu, Canan C., 2015. "Privatization, governance, and survival: MNE investments in private participation projects in emerging economies," Journal of World Business, Elsevier, vol. 50(2), pages 294-301.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Mixed oligopoly; privatization; subsidization; general equilibrium;
    All these keywords.

    JEL classification:

    • 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
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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