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Endogenous Timing with Government's Preference and Privatization

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  • Kangsik, Choi

Abstract

By introducing the government's preference for tax revenues into an extended game with observable delay, this study provides new insight into the trade-off between the government and the public firm's payoff in a government's optimal policy of privatization. The results show that: (i) regardless of the government's preference for tax revenues, the government does not have an incentive to privatize in an endogenous timing context even though there are conflicts of interest between the public firm and the government and (ii) under a mixed duopoly, each sequential-move equilibrium varies with the level of the government's preference for tax revenues.

Suggested Citation

  • Kangsik, Choi, 2009. "Endogenous Timing with Government's Preference and Privatization," MPRA Paper 13844, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13844
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    File URL: https://mpra.ub.uni-muenchen.de/13844/1/MPRA_paper_13844.pdf
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    References listed on IDEAS

    as
    1. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
    2. repec:ebl:ecbull:v:12:y:2008:i:28:p:1-10 is not listed on IDEAS
    3. Mario Jametti & Marius Brülhart, 2007. "Does Tax Competition Tame the Leviathan?," Working Papers 2007_7, York University, Department of Economics.
    4. Toshihiro Matsumura, 2003. "Stackelberg Mixed Duopoly with a Foreign Competitor," Bulletin of Economic Research, Wiley Blackwell, vol. 55(3), pages 275-287, July.
    5. Mujumdar, Sudesh & Pal, Debashis, 1998. "Effects of indirect taxation in a mixed oligopoly," Economics Letters, Elsevier, vol. 58(2), pages 199-204, February.
    6. Zax, Jeffrey S, 1989. "Is There a Leviathan in Your Neighborhood?," American Economic Review, American Economic Association, vol. 79(3), pages 560-567, June.
    7. De Fraja, Giovanni, 1991. "Efficiency and Privatisation in Imperfectly Competitive Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 39(3), pages 311-321, March.
    8. repec:ebl:ecbull:v:12:y:2002:i:1:p:1-6 is not listed on IDEAS
    9. Michael Rauscher, 2000. "Interjurisdictional Competition and Public-Sector Prodigality: The Triumph of the Market over the State?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 1-89, September.
    10. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    11. Jacques, Armel, 2004. "Endogenous timing in a mixed oligopoly: a forgotten equilibrium," Economics Letters, Elsevier, vol. 83(2), pages 147-148, May.
    12. Rudra Sensarma & Bibhas Saha, 2008. "The Distributive Role of Managerial Incentives in a Mixed Duopoly," Economics Bulletin, AccessEcon, vol. 12(28), pages 1-10.
    13. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
    14. Fjell, Kenneth & Heywood, John S., 2004. "Mixed oligopoly, subsidization and the order of firm's moves: the relevance of privatization," Economics Letters, Elsevier, vol. 83(3), pages 411-416, June.
    15. Forbes, Kevin F & Zampelli, Ernest M, 1989. "Is Leviathan a Mythical Beast?," American Economic Review, American Economic Association, vol. 79(3), pages 568-577, June.
    16. Michael J. Keen & Christos Kotsogiannis, 2002. "Does Federalism Lead to Excessively High Taxes?," American Economic Review, American Economic Association, vol. 92(1), pages 363-370, March.
    17. Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
    18. Juan Bárcena-Ruiz, 2007. "Endogenous Timing in a Mixed Duopoly: Price Competition," Journal of Economics, Springer, vol. 91(3), pages 263-272, July.
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    More about this item

    Keywords

    Government's Preference; Extended Game; Tax; Privatization;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • 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

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