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Nash bargaining and partial privatization in mixed oligopoly

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  • Nakamura, Tamotsu
  • Takami, Hiroyuki

Abstract

Neither full nationalization nor full privatization is optimal under moderate conditions in homogenous mixed oligopoly. The result is obtained assuming that a partially-privatized firm maximizes a weighted sum of its profits and the total surplus. If, however, a firm is jointly owned by two different interest parties, the decisions must be made as a result of bargaining between them. This paper shows that the non-optimality result holds even if the privatized firm's strategy is determined by Nash bargaining between the private sector and the public sector. Although partial privatization is optimal for both cases, the optimal degree of partial privatization is different. It is smaller with bargaining than without bargaining.

Suggested Citation

  • Nakamura, Tamotsu & Takami, Hiroyuki, 2015. "Nash bargaining and partial privatization in mixed oligopoly," Economic Modelling, Elsevier, vol. 46(C), pages 315-321.
    • Handle: RePEc:eee:ecmode:v:46:y:2015:i:c:p:315-321
    DOI: 10.1016/j.econmod.2014.12.026
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    Cited by:

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    4. Lee, Sang-Ho & Nakamura, Tamotsu & Park, Chul-Hi, 2017. "Optimal Privatization Policy in a Mixed Eco-Industry in the Presence of Commitments on Abatement Technologies," MPRA Paper 80902, University Library of Munich, Germany.
    5. Yan, Qingyou & Yang, Le, 2018. "Optimal licensing schemes for a mixed ownership firm when facing uncertain R&D outcomes and technology spillover," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 550-572.
    6. Zhou, Rui & Li, Johnny Siu-Hang & Tan, Ken Seng, 2015. "Modeling longevity risk transfers as Nash bargaining problems: Methodology and insights," Economic Modelling, Elsevier, vol. 51(C), pages 460-472.
    7. José Méndez‐Naya & José A. Novo‐Peteiro, 2023. "Partial privatization with endogenous choice of strategic variable," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1215-1227, March.
    8. Wang, Chia-Chi & Chiou, Jiunn-Rong, 2018. "Optimal privatization policy with Bertrand competition," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 538-546.
    9. Junlong Chen & Chaoqun Sun & Ruiyu He & Yibing Zhang & Jiali Liu, 2023. "Optimal nationalization policy in a heterogeneous mixed oligopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 807-827, March.

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