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Competition and Privatisation Policies in a Differentiated Mixed Oligopoly: The Pay†off†interdependence Approach

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  • Yasuhiko Nakamura

Abstract

I revisit the relationship between competition and privatisation policies in a mixed oligopoly with differentiated goods, following the pay†off†interdependence approach in the fashion of Matsumura and Okamura. We find that although the intensity of market competition increases with the degree of importance of each firm's relative performance, the optimal degree of privatisation can decrease in a differentiated goods mixed oligopoly in both the increasing marginal costs case and the constant marginal costs case. Further, given the degree of importance of each firm's relative performance and the number of private firms, we find that the optimal degree of privatisation can decrease as the degree of product differentiation declines. Finally, by considering an alternative†pay†off model in both cases, we compare the optimal degree of privatisation of the public firm.

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  • Yasuhiko Nakamura, 2018. "Competition and Privatisation Policies in a Differentiated Mixed Oligopoly: The Pay†off†interdependence Approach," Australian Economic Papers, Wiley Blackwell, vol. 57(2), pages 193-216, June.
    • Handle: RePEc:bla:ausecp:v:57:y:2018:i:2:p:193-216
    DOI: 10.1111/1467-8454.12111
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    Cited by:

    1. Akio Kawasaki, 2021. "Optimal number of privatised products in a differentiated mixed oligopoly with free market entry," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 651-663, December.
    2. Xu, Lili & Matsumura, Toshihiro, 2022. "Welfare-reducing price competition under relative performance delegation with convex costs," Economic Modelling, Elsevier, vol. 112(C).
    3. Pu‐yan Nie & Yong‐cong Yang, 2020. "Cost‐reduction innovation under mixed economy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1195-1201, October.

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