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Multiple Long-Run Equilibria in a Free-Entry Mixed Oligopoly

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  • Haraguchi, Junichi
  • Matsumura, Toshihiro

Abstract

We investigate a free-entry mixed oligopoly with constant marginal costs. A privatization policy is implemented after private firms enter the market. We find that both full privatization and full nationalization are equilibrium policies, and the former is the worst privatization policy for welfare.

Suggested Citation

  • Haraguchi, Junichi & Matsumura, Toshihiro, 2018. "Multiple Long-Run Equilibria in a Free-Entry Mixed Oligopoly," MPRA Paper 86704, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:86704
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    File URL: https://mpra.ub.uni-muenchen.de/86704/2/MPRA_paper_86704.pdf
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    References listed on IDEAS

    as
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    22. Ming Lin & Toshihiro Matsumura, 2012. "Presence of foreign investors in privatized firms and privatization policy," Journal of Economics, Springer, vol. 107(1), pages 71-80, September.
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    24. Susumu Cato & Toshihiro Matsumura, 2013. "Long-Run Effects of Tax Policies in a Mixed Market," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 69(2), pages 215-240, June.
    25. Carlo Capuano & Giuseppe De Feo, 2010. "Privatization in Oligopoly: the Impact of the Shadow Cost of Public Funds," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 175-208.
    26. Toshihiro Matsumura & Noriaki Matsushima, 2004. "Endogenous Cost Differentials between Public and Private Enterprises: A Mixed Duopoly Approach," Economica, London School of Economics and Political Science, vol. 71(284), pages 671-688, November.
    27. Yongmin Chen & Michael H. Riordan, 2007. "Price and Variety in the Spokes Model," Economic Journal, Royal Economic Society, vol. 117(522), pages 897-921, July.
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    Cited by:

    1. Liu, Yi & Lahiri, Sajal & Liu, Tianqi, 2018. "Optimal Partial Privatization in the Presence of Foreign Competition: The Role of Efficiency Differentials and Unemployment," MPRA Paper 91471, University Library of Munich, Germany, revised 23 Jan 2019.
    2. Gil-Moltó, Maria José & Poyago-Theotoky, Joanna & Rodrigues-Neto, José A. & Zikos, Vasileios, 2020. "Mixed oligopoly, cost-reducing research and development, and privatisation," European Journal of Operational Research, Elsevier, vol. 283(3), pages 1094-1106.

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    More about this item

    Keywords

    entry-then-privatization; constant marginal costs; profit-enhancing entry; two polar equilibrium privatization policies;
    All these 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
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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