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- Title
MIXED OLIGOPOLY, SEQUENTIAL ENTRY, AND SPATIAL PRICE DISCRIMINATION.
- Authors
HEYWOOD, JOHN S.; YE, GUANGLIANG
- Abstract
This paper is the first to examine the welfare consequences of a public firm in a traditional model of spatial price discrimination. It demonstrates that when a private firm acts as a Stackelberg location leader, the presence of a public firm always improves welfare. Moreover, when three firms locate sequentially, the presence of a public firm improves social welfare unless it locates last. Thus, despite examining a variety of location timings, including simultaneous location, privatization never improves welfare and usually harms welfare. This conclusion differs from several currently in the literature in which privatization often improves welfare. ( JEL L13, L32, L33, L52)
- Subjects
MIXED economy; OLIGOPOLIES; PUBLIC welfare; ECONOMICS; PRICE discrimination; GOVERNMENT corporations; INDUSTRIAL location; PRIVATE companies; GOVERNMENT policy
- Publication
Economic Inquiry, 2009, Vol 47, Issue 3, p589
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/j.1465-7295.2008.00134.x