Multiple Long-Run Equilibria in a Free-Entry Mixed Oligopoly

Haraguchi, Junichi and Matsumura, Toshihiro (2018): Multiple Long-Run Equilibria in a Free-Entry Mixed Oligopoly.

Abstract

We investigate a free-entry mixed oligopoly with constant marginal costs. A privatization policy is implemented after private firms enter the market. We find that both full privatization and full nationalization are equilibrium policies, and the former is the worst privatization policy for welfare.

• Item Type: MPRA Paper
• Language: English
• Keywords: entry-then-privatization, constant marginal costs, profit-enhancing entry, two polar equilibrium privatization policies
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; H - Public Economics > H4 - Publicly Provided Goods > H44 - Publicly Provided Goods: Mixed Markets; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out

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