The nexus of market concentration and privatization policy in mixed oligopoly

We analyze the nexus of privatization policy and market concentration ratio in a mixed oligopoly where one public enterprise competes against n private firms with asymmetric costs. It is shown that the nexus of privatization policy and market concentration ratio is highly sensitive to the curvature of the market demand. When the market demand is concave (convex) to the origin, a higher concentration ratio leads to a higher (smaller) degree of privatization; whereas in the case of linear demand, the privatization ratio is independent of market concentration ratio.