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In this paper, we consider the relative efficiency of unit taxation and ad valorem taxation in terms of welfare implications in different imperfectly competitive markets. Under the assumption that these two taxations can produce the same total output in equilibrium, which is also used by Anderson (2001), we show that ad valorem taxation is always welfare superior to unit taxation under full nationalisation, full privatisation, and partial privatisation.

In the standard leader-follower duopoly models with otherwise symmetric firms, the market outcome and total welfare are the same whichever firm is the leader. This paper studies and compares total welfare in a sequential-move mixed duopoly when either the public firm or the private firm acts as the leader. It is found that the fact that which firm is the leader affects total welfare and that whether firms compete in quantity or price also affects the optimal choice of market leader.

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Based on the current context of DE-Capacity in China, this article explores the impact of the merger of public and private firms on capacity and social welfare, with the aim of giving theoretical support to the current practice of mergers and acquisitions in China. With a mixed oligopoly model and Cournot-Nash equilibrium, we conclude that the merger of firms can achieve the goal of DE-Capacity in the market environment dominated by public firms, and that at the same time the social welfare will increase. We also find that if the modest privatisation is considered in the merger then the ultimate social welfare can also obtain further growth with DE-Capacity. In particular, according to the goal of welfare maximisation under different efficiency, we give the optimal privatisation ratio for the merger of public and private firms. However, in the market environment dominated by private firms, the merger of public and private firms cannot achieve the result of increasing social welfare along with DE-Capacity.