Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination

Eleftheriou, Konstantinos and Michelacakis, Nickolas (2015): Socially optimal Nash equilibrium locations and privatization in a model of spatial duopoly with price discrimination.

Abstract

We generalize the results obtained by Braid (2008) and Beladi et al. (2014) for any non-negative, increasing, continuous function of distance as transportation cost function. By doing so, we show that in a duopoly, partial privatization does not change the socially optimal character of the Nash equilibrium location. Our results call for further research on testing their robustness under the existence of more than two competing firms.

• Item Type: MPRA Paper
• Language: English
• Keywords: Privatization; Social optimality; Spatial competition; Transportation costs
• Subjects: 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; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R32 - Other Spatial Production and Pricing Analysis

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