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Mixed Oligopoly, Privatization, and Strategic Trade Policy

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  • Debashis Pal
  • Mark D. White

Abstract

This paper investigates the effects of privatization in the presence of strategic trade policies within an international mixed oligopoly serving a single market. If the government uses a domestic production subsidy, then welfare is always increased with privatization, while the optimal subsidy falls. If the government uses an import tariff, privatization increases welfare over much of the parameter space. The optimal tariff, however, may rise or fall.

Suggested Citation

  • Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 264-281, October.
    • Handle: RePEc:wly:soecon:v:65:y:1998:i:2:p:264-281
    DOI: 10.1002/j.2325-8012.1998.tb00149.x
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    References listed on IDEAS

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    1. repec:bla:econom:v:57:y:1990:i:227:p:319-28 is not listed on IDEAS
    2. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1989. "The Public Firm as an Instrument for Regulating an Oligopolistic Market," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 283-301, April.
    3. Paul Krugman, 1986. "Strategic Trade Policy and the New International Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610450, April.
    4. Kenneth Fjell & Debashis Pal, 1996. "A Mixed Oligopoly in the Presence of Foreign Private Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 737-743, August.
    5. Mujumdar, Sudesh & Pal, Debashis, 1998. "Effects of indirect taxation in a mixed oligopoly," Economics Letters, Elsevier, vol. 58(2), pages 199-204, February.
    6. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1991. "Mixed oligopoly with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 43-53, March.
    7. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    8. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    9. de Fraja, Giovanni & Delbono, Flavio, 1990. "Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
    10. Gene M. Grossman (ed.), 1992. "Imperfect Competition and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262570939, April.
    11. de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-311, April.
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    Cited by:

    1. Ya‐Po Yang & Qidi Zhang & Leonard F. S. Wang, 2022. "Tariff simplification, privatization, and welfare superiority," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 683-707, May.
    2. Chuyuan Zhang & Sang‐Ho Lee, 2023. "Entry decision of a vertically integrated foreign firm with downstream subsidization and upstream privatization," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 273-299, March.
    3. Kazuhiro Takauchi & Tomomichi Mizuno, 2022. "Optimal tariffs for the co-existence of exporting and non-exporting firms," Discussion Papers 2214, Graduate School of Economics, Kobe University.
    4. Yi Liu & Toshihiro Matsumura, 2024. "Welfare effects of common ownership in an international duopoly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(2), pages 459-477, May.
    5. Alessandra Chirco & Marcella Scrimitore, 2023. "Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition," Discussion Papers 2023/301, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    6. Meccheri, Nicola, 2023. "Unionised dockworkers and port ownership structure in an international oligopoly," GLO Discussion Paper Series 1326, Global Labor Organization (GLO).
    7. Xingtang Wang & Leonard F. S. Wang, 2024. "Corporate social responsibility and tariff policy in a differentiated mixed duopoly," Bulletin of Economic Research, Wiley Blackwell, vol. 76(2), pages 470-487, April.
    8. Ngo Van Long & Frank Staehler, 2007. "Public Ownership and Trade Policy," CIRANO Working Papers 2007s-07, CIRANO.
    9. Suzuka Okuyama, 2022. "Behavior-based Price Discrimination in the Domestic and International Mixed duopoly," ISER Discussion Paper 1179, Institute of Social and Economic Research, Osaka University.
    10. Kazuhiro Ohnishi, 2022. "Lifetime Employment and Stackelberg Mixed Duopoly Games with a Foreign Labour-Managed Competitor," Arthaniti: Journal of Economic Theory and Practice, , vol. 21(1), pages 27-42, June.
    11. Akio Kawasaki & Takao Ohkawa & Makoto Okamura, 2022. "Optimal partial privatization in an endogenous timing game: a mixed oligopoly approach," Journal of Economics, Springer, vol. 136(3), pages 227-250, August.
    12. Xu, Lili & Lee, Sang-Ho, 2024. "Endogenous competition with an integrated public utility firm under an output subsidy policy," Utilities Policy, Elsevier, vol. 87(C).
    13. Ryu, Han Eol, 2023. "Public utility ownership and in-kind trade policy in vertically related markets," Utilities Policy, Elsevier, vol. 81(C).

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