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Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition

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  • Alessandra Chirco
  • Marcella Scrimitore

Abstract

By developing a linear model in a two-country framework of international price competition, we show how the degree of product differentiation and the cross-country distribution of private firms affect the strategic privatization choices made by governments concerned with their own country’s welfare. More particularly, the work points out that sufficiently low product differentiation may lead public ownership to be optimally chosen to restrict competition in the country with the larger number of firms, and privatization to be global welfare enhancing in this case.

Suggested Citation

  • Alessandra Chirco & Marcella Scrimitore, 2017. "Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition," EERI Research Paper Series EERI RP 2017/06, Economics and Econometrics Research Institute (EERI), Brussels.
    • Handle: RePEc:eei:rpaper:eeri_rp_2017_06
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    File URL: http://www.eeri.eu/documents/wp/EERI_RP_2017_06.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Mixed oligopoly; price competition; strategic privatization; international markets.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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