Location choice in a mixed oligopoly

In this paper, we develop a location-quantity model of mixed oligopoly where a welfare-maximizing firm competes against multi-store profit-maximizing firms. We show that agglomeration of private firms occurs in a circular market regardless of the number of stores of the public firm. Whether or not equidistant location patterns exist depends crucially on the number of stores of the public firm. If the public firm has a single store, then nonequidistant location pattern arises. However, if the public firm has two stores, then under the assumption of quasi-symmetric location patterns, equidistant location pattern is the outcome in equilibrium.