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Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result for the general case

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  • Gareth Myles

    (Institute for Fiscal Studies and University of Exeter)

Abstract

It is proved that the irrelevance result of Poyago-Theotoky can be extended from the linear-quadratic case to general inverse demand and cost functions. Hence, as long as firms are profitable at the first-best, the optimal subsidy decentralizes it in mixed oligopoly irrespecitve of whether the public firm maximizes welfare or profit and moves simultaneously with private firms, or maximizes welfare and acts as a Stackelberg leader.

Suggested Citation

  • Gareth Myles, 2002. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result for the general case," Economics Bulletin, AccessEcon, vol. 12(1), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-01l10005
    as

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    References listed on IDEAS

    as
    1. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    2. Joanna Poyago-Theotoky, 2001. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-5.
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    More about this item

    Keywords

    first-best;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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