Mixed Duopoly with Price Competition

Roy Chowdhury, Prabal (2009): Mixed Duopoly with Price Competition.

Abstract

This paper examines coalition-proof Nash equilibria (CPNE) of a mixed duopoly with price competition where the public firm meets all the demand coming to it. If the private firm is free to supply less than demand, then the unique CPNE involves the competitive price. If however the private firm also has to supply all its demand, then the set of CPNE prices turns out to be an interval, with prices ranging from the socially optimal one, to the price under complete privatization.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mixed duopoly; coalition-proof Nash equilibrium; price competition
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance

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