Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95341
Authors: 
Amir, Rabah
De Feo, Giuseppe
Year of Publication: 
2012
Series/Report no.: 
Quaderni di Dipartimento 162
Abstract: 
This paper applies the framework of endogenous timing in games to mixed quantity duopoly, wherein a private – domestic or foreign – firm competes with a public, welfare maximizing firm. We show that simultaneous play never emerges as a subgame-perfect equilibrium of the extended game, in sharp contrast to private duopoly games. We provide sufficient conditions for the emergence of public and/or private leadership equilibrium. In all cases, private profits and social welfare are higher than under the corresponding Cournot equilibrium. From a methodological viewpoint we make extensive use of the basic results from the theory of supermodular games in order to avoid common extraneous assumptions such as concavity, existence and uniqueness of the different equilibria, whenever possible. Some policy implications are drawn, in particular those relating to the merits of privatization.
Subjects: 
Mixed markets
endogenous timing
Cournot equilibrium
Stackelberg equilibrium
privatization
JEL: 
C72
D43
H42
L13
Document Type: 
Working Paper

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