International mixed triopoly, privatization and subsidization: Complementary goods

Ohnishi, Kazuhiro (2023): International mixed triopoly, privatization and subsidization: Complementary goods.

Abstract

This paper examines the effects of production subsidies regarding privatization in an international mixed market where one state-owned firm coexists with domestic private and foreign private firms. The firms produce complementary goods. The paper considers four games: unsubsidized international mixed triopoly, subsidized international mixed triopoly, unsubsidized international private triopoly, and subsidized international private triopoly. The first two games are international mixed triopoly games in which a state-owned public firm, a domestic private firm and a foreign private firm coexist with each other, and the second two games are international private triopoly games in which the state-owned public firm is privatized. This paper demonstrates that if optimal production subsidies are used before and after privatization in an international mixed market with complementary goods, then privatization decreases domestic social welfare.

• Item Type: MPRA Paper
• Language: English
• Keywords: Complementary goods; International mixed triopoly; Privatization; Subsidy
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L32 - Public Enterprises ; Public-Private Enterprises

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