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Title: Mixed oligopoly, public firm behavior, and free private entry
Authors: Bennett, J
La Manna, M
Keywords: Mixed oligopoly;Entry;Privatization
Issue Date: 2012
Publisher: Elsevier
Citation: Economics Letters, 117(3), 767 - 769, 2012
Abstract: We analyze a mixed oligopoly with free entry by private firms, assuming that a public firm maximizes an increasing function of output, subject to a break-even constraint. We establish an irrelevance result: whenever a mixed oligopoly is viable, then aggregate output, aggregate costs and welfare are the same with and without the public firm. However, replacing a viable mixed oligopoly with a public monopoly yields higher net welfare. Implications for privatization policy are suggested.
Description: © 2012 Elsevier B.V. All rights reserved
ISSN: 0165-1765
Appears in Collections:Publications
Dept of Economics and Finance Research Papers

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