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The
optimal privatization policy with price competition |
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Working paper |
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This
paper investigates the price competition in a mixed oligopoly which consists
of one public firm and one private firm. The two stage games are considered. In stage 1, the
government chooses the optimal degree of privatization. In stage 2, firms are
engage in Cournot competition. Three
interesting results are obtained in this paper. First, the public firm¡¦s
price is not necessarily lower than the private firm¡¦s; it can even be
higher. Second, in the popular view, privatization will increase the public
firm¡¦s price. However, we find that privatization should not necessary
increase the public firm¡¦s price. As the public firm¡¦s cost is high enough,
privatization will make the public firm lower price. Third, we show that the
less efficient the public firm is, the less the one needs to be privatized. |
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1.
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surplus improving effect ¤Îoutput allocation effect ¤§¦Wµü¨Ï¥Î¥i¦b°Ñ°u¦Ò¶q¡C 2.
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