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Subsidization And Bargaining In Mixed Oligopolies

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  • Cai Dapeng
  • Li Jie

Abstract

type="main"> In this paper, we consider political interaction in a mixed oligopoly by characterizing how a subsidy is endogenously determined through the bargaining process between firms and politicians. We discuss how the nature of the political equilibrium changes with the type of competition, the specification of the cost function, and the timing of the game. We show that when bargaining between firms and politicians takes place, the resulting social welfare may be even worse than that under a public firm monopoly.

Suggested Citation

  • Cai Dapeng & Li Jie, 2014. "Subsidization And Bargaining In Mixed Oligopolies," Bulletin of Economic Research, Wiley Blackwell, vol. 66(4), pages 358-373, October.
    • Handle: RePEc:bla:buecrs:v:66:y:2014:i:4:p:358-373
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    File URL: http://hdl.handle.net/10.1111/j.1467-8586.2012.00453.x
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