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 study the order of moves in a mixed duopoly with a state-owned public firm and a partially foreign-owned private competitor. We extend our analysis to a Cournot duopoly model that includes a non-linear demand function. 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 indicate that, when the private firm’s foreign ownership is high, the public firm consistently assumes a leadership role in output decisions. Conversely, if the private firm’s foreign ownership is relatively low, the public firm may act either as the leader or as the follower in the market.

• 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

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