Mixed Oligopoly at Free Entry Markets

Matsumura, Toshihiro; Kanda, Osamu

doi:10.1007/s00712-004-0098-z

Cited by 219 publications

(170 citation statements)

References 36 publications

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“…Because p − c > 0 in the imperfectly competitive 15 Again this result is not new in the literature on mixed oligopolies. Matsumura and Kanda (2005) showed it in the case of θ = 0.…”

Section: Proposition 1 the Domestic Welfare Is Increasing (Decreasingmentioning

confidence: 91%

“…For example, suppose that θ = 0. As discussed in Matsumura and Kanda (2005), when the marginal cost of firm 0 is constant, firm 0's production level is zero if c 0 > p(Q * ) and the number of entering firms is zero if c 0 < p(Q * ). Therefore, mixed oligopolies do not appear (either a public monopoly or a private oligopoly appears) unless c 0 = p(Q * ).…”

Section: Modelmentioning

confidence: 99%

“…Matsumura and Kanda (2005) adopted the partial privatization approach formulated by Matsumura (1998) and showed that the optimal degree of privatization is zero when private competitors are domestic, while Cato and Matsumura (2012) showed that it is strictly positive when they are foreign and that this is increasing in the foreign ownership share in private firms. Fujiwara (2007) showed a non-monotonic relationship between the degree of product differentiation and optimal degree of privatization.…”

Section: Introductionmentioning

confidence: 99%

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An analysis of entry-then-privatization model: welfare and policy implications

2017

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This study formulates a new model of mixed oligopolies in free entry markets. A stateowned public enterprise is established before the game, private enterprises enter the market, and then the government chooses the degree of privatization of the public enterprise (termed the entry-then-privatization model herein). We find that under general demand and cost functions, the timing of privatization does not affect consumer surplus or the output of each private firm, while it does affect the equilibrium degree of privatization, number of entering firms, and output of the public firm. The equilibrium degree of privatization is too high (low) for both domestic and world welfare if private firms are domestic (foreign). JEL classification H42, L13

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“…Because p − c > 0 in the imperfectly competitive 15 Again this result is not new in the literature on mixed oligopolies. Matsumura and Kanda (2005) showed it in the case of θ = 0.…”

Section: Proposition 1 the Domestic Welfare Is Increasing (Decreasingmentioning

confidence: 91%

Section: Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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An analysis of entry-then-privatization model: welfare and policy implications

2017

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“…They obtain that foreign competition lowers the optimal tariff rate while partial privatization raises it. Matsumura and Kanda (2005) show that privatization of the public firm is not optimal in a free entry market.…”

Section: Partially-privatized Public Firm Vs Domestic Private Firmmentioning

confidence: 96%

“…6 A similar cost function can also be found in Fershtman (1990), Fjell and Pal (1996), Matsumura (2003a), Chang (2004, and Matsumura and Kanda (2005). For simplicity, we ignore the fixed cost.…”

Section: The Basic Modelmentioning

confidence: 97%

Mixed Oligopoly under Demand Uncertainty

Anam

Basher

Chiang

2007

The B.E. Journal of Theoretical Economics

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In this paper we introduce product demand uncertainty in a mixed oligopoly model and reexamine the nature of sub-game perfect Nash equilibrium (SPNE) when firms decide in the first stage whether to lead or follow in the subsequent quantity-setting game. In the non-stochastic setting, Pal (1998) demonstrated that when the public firm competes with a domestic private firm, multiple equilibria exist but the efficient equilibrium outcome is for the public firm to follow. Matsumura (2003a) proved that when the public firm's rival is a foreign private firm, leadership of the public firm is both efficient as well as SPN equilibrium. Our stochastic model shows that when the leader must commit to output before the resolution of uncertainty, multiple SPNE is possible. Whether the equilibrium outcome is public or private leadership hinges upon the degree of privatization and market volatility.More importantly, Pareto-inefficient simultaneous production is a likely SPNE. Our results are driven by the fact that the resolution of uncertainty enhances the profits of the follower firm in a manner that is well known in real option theory. JEL classification: C72, D8, L13.Keywords: Mixed oligopoly; Partial privatization; Demand Uncertainty. * We are grateful to three anonymous referees and the editor for useful comments and suggestions. We also thank Debashis Pal, Kin Chung Lo, Ahmed Saber Mahmud, and seminar participants at York University and 2005 CEA meeting for helpful discussions. The usual disclaimer applies.

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Partial Agglomeration or Dispersion in Spatial Cournot Competition

Matsumura

Ohkawa

Shimizu

2005

Southern Economic Journal

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We revisit works by Pal and Matsushima, which, respectively, present different equilibrium locations. We consider nonlinear transport costs and show that Pal's result (dispersion) is more robust than Matsushima's (partial agglomeration). Pal's result holds true for any transport cost function, while Matsushima's does not hold under strong concavity or convexity of the transport cost function. If we consider sequential move of location. Pal's result holds for any transport costs. On the other hand, Matsushima's does not hold except for linear transport cost. We also discuss welfare and show that nonlinearity of the transport cost function yields rich welfare implications.

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Mixed Oligopoly at Free Entry Markets

Cited by 219 publications

References 36 publications

An analysis of entry-then-privatization model: welfare and policy implications

An analysis of entry-then-privatization model: welfare and policy implications

Mixed Oligopoly under Demand Uncertainty

Partial Agglomeration or Dispersion in Spatial Cournot Competition

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