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How privatization affects the strategic choice of managerial incentives: the case of international mixed duopoly

Author

Listed:
  • Kadohognon S Ouattara

    (ESCA ECOLE DE MANAGEMENT (Casablanca) And CREM-UMR CNRS 6211)

Abstract

This paper studies a mixed duopoly where a semi-public firm competes with a foreign private firm. The firm's owners have the option to hire a manager. A novel incentive scheme of semi-public firm's manager is utilized which takes into account the social goals of public authority. In contrast to the results in the existing literature, the paper shows that the decision to hire manager depends on the state-ownership share in the semi-public firm. Yet the paper finds that there exists an equilibrium in which only the semi-public firm hires a manager.

Suggested Citation

  • Kadohognon S Ouattara, 2016. "How privatization affects the strategic choice of managerial incentives: the case of international mixed duopoly," Economics Bulletin, AccessEcon, vol. 36(2), pages 1038-1045.
    • Handle: RePEc:ebl:ecbull:eb-16-00010
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    MIXED OLIGOPOLY; FOREIGN PRIVATE FIRM; MANAGERIAL DELEGATION;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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