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Privatization in a mixed oligopoly: Productivity, market concentration, and the optimal degree of privatization


  • Shinjiro Miyazawa

    () (Graduate School of Economics, Kobe University)


This paper investigates the optimal degree of privatization for a public firm in a homogeneous mixed oligopoly. I show that full privatization is optimal when a public firm has a severe productivity disadvantage or competes with many private firms. The optimal degree of partial privatization is increasing in the degree of productivity disadvantage and the number of private firms. I further show that partial privatization can be optimal for a public firm even when full privatization would completely remove any productivity disadvantages.

Suggested Citation

  • Shinjiro Miyazawa, 2012. "Privatization in a mixed oligopoly: Productivity, market concentration, and the optimal degree of privatization," Discussion Papers 1220, Graduate School of Economics, Kobe University.
  • Handle: RePEc:koe:wpaper:1220

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    quantity-setting competition; partial privatization; mixed oligopoly;

    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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