Behavior-based Price Discrimination in the Domestic and International Mixed duopoly

Okuyama, Suzuka (2021): Behavior-based Price Discrimination in the Domestic and International Mixed duopoly.

Abstract

We investigate mixed markets in which a social welfare-maximizing public firm and a private firm engage in behavior-based price discrimination. We consider two cases: one where the private firm is completely owned by domestic shareholders and one where it is completely owned by foreign shareholders. In the domestic mixed duopoly, BBPD is irrelevant from the viewpoint of social welfare. This is because poaching does not occur. In the international mixed duopoly, BBPD reduces the public firm’s market share but improves domestic social welfare. This is because the outflow to foreign shareholders decreases. We also consider domestic and international pure duopoly and find that the presence of public firms reduces welfare loss caused by BBPD.

• Item Type: MPRA Paper
• Language: English
• Keywords: Behavior-based price discrimination, Mixed oligopoly, Foreign firms, Privatization
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; H - Public Economics > H4 - Publicly Provided Goods > H42 - Publicly Provided Private Goods; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets

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