Are Nonprofits Unfair Competitors for Businesses? An Analytical Approach
Journal of Public Policy and Marketing, 23 (1): 65-79, 2004
16 Pages Posted: 6 Sep 2015
Date Written: 2004
This study examines duopoly price competition between a for-profit firm and a nonprofit organization. It shows that the competitive outcome is predominantly the consequence of their different objective functions. The damage to the for-profit caused by the nonprofit’s policy and regulatory advantages is only marginal. Moreover, the for-profit can protect itself by acquiring Stackelberg price leadership.
Keywords: nonprofits, competitive strategy, game theory, market structure, pricing
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