Stackelberg mixed duopoly with a partially foreign-owned competitor

Ohnishi, Kazuhiro (2025): Stackelberg mixed duopoly with a partially foreign-owned competitor.

Abstract

An existing study examines an international mixed duopoly involving a state-owned public firm and a foreign private firm, focusing on their timing choices for quantities and showing that the state-owned public firm should act as the leader. This result differs from that for an endogenous-timing mixed duopoly model where a state-owned public firm coexists with a domestic private firm. We investigate the endogenous order of moves in a mixed duopoly model where a state-owned public firm competes with a private firm that is partially foreign-owned. Specifically, we explore the desirable role of the state-owned public firm, either as a leader or a follower, and present the equilibrium outcome of the model. Our findings reveal that the equilibrium differs depending on whether the foreign ownership ratio of the private firm is low or high.

• Item Type: MPRA Paper
• Language: English
• Keywords: Endogenous timing; Mixed oligopoly; Partial foreign ownership; Stackelberg
• 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 > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L32 - Public Enterprises ; Public-Private Enterprises

References

Amir, R., De Feo, G., 2014. Endogenous timing in a mixed duopoly. International Journal of Game Theory 43 (3), 629-658.

Deibono, F., Scarpa, C., 1995. Upward-sloping reaction functions under quantity competition in mixed oligopolies. Bulletin of Economic Research 47 (4), 341-346.

Fernández-Ruiz, J., 2009. Managerial delegation in a mixed duopoly with a foreign competitor. Economics Bulletin 29 (1), 90-99.

Fjell, K., Pal, D., 1996. A mixed oligopoly in the presence of foreign private firms. Canadian Journal of Economics 29 (3), 737-743.

Gunderson, M., 1979. Earnings differentials between the public and private sectors. Canadian Journal of Economics 12 (2), 228-242.

Hamilton, J. H., Slutsky, S. M., 1990. Endogenous timing in duopoly games: Stackelberg or Cournot equilibria. Games and Economic Behavior 2 (1), 29-46.

Lu, Y., 2006. Endogenous timing in a mixed oligopoly with foreign private competitors: the linear demand case. Journal of Economics 88 (1), 49-68.

Lu, Y., 2007. Endogenous timing in a mixed oligopoly consisting of a single public firm and foreign competitors. Economics Bulletin 12 (2), 1-7.

Matsumura, T., 2003. Stackelberg mixed duopoly with a foreign competitor. Bulletin of Economic Research 55 (3), 275-287.

Nett, L., 1993. Mixed oligopoly with homogeneous goods. Annals of Public and Cooperative Economics 64 (3), 367-393.

Nett, L., 1994. Why private firms are more innovative than public firms. European Journal of Political Economy 10 (4), 639-653.

Ohnishi, K., 2012. Domestic and foreign ownership of private sector in mixed duopoly. Microeconomics and Macroeconomics 1 (2), 24-27.

Ohnishi, K., 2021. Mixed duopoly, privatization, subsidization and partial foreign ownership. International Journal of Management, Accounting and Economics 8 (9), 707-714.

Pal, D., 1998. Endogenous timing in a mixed oligopoly. Economics Letters 61 (2), 181-185.