Incentives for Anticompetitive Behavior by Public Enterprises
24 Pages Posted: 4 Aug 2003 Last revised: 2 Nov 2009
Date Written: 2003
We examine the competitive behavior of a public enterprise that does not seek solely to maximize its profit. We find that despite a reduced focus on profit, a public enterprise may have stronger incentives to pursue anticompetitive activities than does a private, profit-maximizing firm. These activities include setting prices below marginal cost, raising the operating costs of existing rivals, erecting entry barriers to preclude the operation of new competitors, and circumventing regulations designed to foster competition.
Keywords: public enterprises, anticompetitive activities, barriers to entry, setting prices, marginal cost, anticompetitive behavior
JEL Classification: L44, H10, K21
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Deadweight Costs and the Size of Government
By Gary S. Becker and Casey B. Mulligan
E-Ztax: Tax Salience and Tax Rates
Transforming Payment Choices By Doubling Fees on the Illinois Tollway
By Gene Amromin, Carrie Jankowski, ...
The Economic Winners and Losers of Legalized Gambling
Antitrust and the Not-for-Profit Sector
By Tomas Philipson and Richard A. Posner
The Social and Economic Impact of Native American Casinos
The Future of the Nonprofit Sector: Its Entwining with Private Enterprise and Government
Taxation and Big Brother: Information, Personalization, and Privacy in 21st Century Tax Policy
Orwell Versus Huxley: Economics, Technology, Privacy, and Satire
Are Public Enterprises the Only Credible Predators?