Mixed oligopoly, public firm behavior, and free private entry

John Bennett, Manfredi M A La Manna

    Research output: Contribution to journalArticlepeer-review

    17 Citations (Scopus)

    Abstract

    We analyze a mixed oligopoly with free entry by private …rms, assum-
    ing that a public …rm 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 wel-
    fare are the same with and without the public …rm. However, replacing a
    viable mixed oligopoly with a public monopoly yields higher net welfare.
    Implications for privatization policy are suggested.
    Original languageEnglish
    Pages (from-to)767-769
    Number of pages3
    JournalEconomics Letters
    Volume117
    Issue number3
    DOIs
    Publication statusPublished - Dec 2012

    Keywords

    • Mixed oligopoly
    • Entry
    • Privatization

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