Optimal Privatization and Entry in a Differentiated Mixed Oligopoly

34 Pages Posted: 9 Mar 2013 Last revised: 6 Aug 2014

See all articles by Vinay Ramani

Vinay Ramani

Indian Institute of Management (IIMU), Udaipur

Bibhas Saha

University of East Anglia (UEA) - School of Economic and Social Studies

Date Written: August 19, 2012

Abstract

We address two questions. First, does the excess entry result of pure oligopoly hold when firms face a substitute good produced by a public firm? Second, what would be the optimal ownership of the public firm? We find that excess entry still occurs, but the excessiveness is largely mitigated due to the presence of the public firm. On the ownership of the public firm, we find that partial privatization need not always be optimal. Depending on the substitutability of the two products, the social optimum may involve one or more private firms, and full or partial public ownership.

Keywords: partial privatization, mixed oligopoly, entry

Suggested Citation

Ramani, Vinay and Saha, Bibhas C., Optimal Privatization and Entry in a Differentiated Mixed Oligopoly (August 19, 2012). Indian Institute of Management Udaipur Research Paper Series No. 2012-2171274, Available at SSRN: https://ssrn.com/abstract=2230308 or http://dx.doi.org/10.2139/ssrn.2230308

Vinay Ramani (Contact Author)

Indian Institute of Management (IIMU), Udaipur ( email )

Mohanlal Sukhadia University Campus
Udaipur, Rajasthan 313001
India

Bibhas C. Saha

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom
+44 0 1603 593404 (Phone)
+44 0 1603 456259 (Fax)

HOME PAGE: http://www.uea.ac.uk/eco/people/saha_b.htm

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