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The welfare impact of a managerial oligopoly with an altruistic firm

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  • Johan Willner

Abstract

I analyse the welfare impact of a mixed market with a private or public firm that is characterised by wider objectives or altruism, in the presence of an agency problem. Contrary to some earlier findings, the total surplus turns out to be increasing in the degree of altruism. This impact is stronger than without an agency problem, despite more stringent conditions for the market to remain mixed. The altruistic firm is more cost efficient, and viable if the market can remain mixed. A competition policy that encourages entry may increase welfare, but its scope is reduced by higher altruism. Copyright Springer-Verlag 2013

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  • Johan Willner, 2013. "The welfare impact of a managerial oligopoly with an altruistic firm," Journal of Economics, Springer, vol. 109(2), pages 97-115, June.
    • Handle: RePEc:kap:jeczfn:v:109:y:2013:i:2:p:97-115
    DOI: 10.1007/s00712-012-0291-7
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    More about this item

    Keywords

    Altruistic firms; Mixed oligopoly; Competition policy; Public firms; L32; L33; L44; H42;
    All these keywords.

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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