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Privatizing a service sector: where to start?

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  • Jacek Cukrowski

Abstract

This paper develops a theoretical framework for the analysis of transformation of the service sector during privatization process. A simple model which includes a supplier of services and retail firms is presented and applied to study the effects of various sequences of privatization. Our findings indicate that privatizing the supplier first is always at least as good as privatizing the retailers first because (unlike the strategy of privatizing the retail firms first) it increases both the number of retail firms and profit of the supplier.

Suggested Citation

  • Jacek Cukrowski, 2002. "Privatizing a service sector: where to start?," Prague Economic Papers, Prague University of Economics and Business, vol. 2002(3), pages 269-279.
    • Handle: RePEc:prg:jnlpep:v:2002:y:2002:i:3:id:198
    DOI: 10.18267/j.pep.198
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    More about this item

    Keywords

    privatization; service sector; demand uncertainty; trade in services; retail market;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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