Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159850
Authors: 
Benassi, Corrado
Castellani, Massimiliano
Mussoni, Maurizio
Year of Publication: 
2015
Series/Report no.: 
Quaderni - Working Paper DSE 1012
Abstract: 
In the framework of a vertically differentiated mixed duopoly, with uncovered market and costless quality choice, we study the existence of a price equilibrium when a welfare-maximizing public firm producing low quality goods competes against a profit-maximizing private firm producing high quality goods. We show that a price equilibrium exists if the quality spectrum is wide enough vis à vis a measure of the convexity of the distribution of the consumers' willingness to pay, and that such equilibrium is unique if this sufficient condition is tightened. Log-concavity of the income distribution is inconsistent with the existence of equilibrium.
JEL: 
D43
L13
L51
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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