Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5059999 | Economics Letters | 2013 | 5 Pages |
Abstract
This paper investigates the endogenous choice of the strategic variable, price or quantity, taken in a mixed duopoly by a public and a private firm prior to market competition. While Matsumura and Ogawa (2012) in a standard mixed duopoly find that price is the unique equilibrium, we show that, by introducing firm subsidization in the same setting, quantity can constitute a dominant strategy equilibrium.
⺠We investigate the endogenous choice of the competition strategy. ⺠We assume that a public firm competes against a private firm. ⺠We assume that firms are subsidized by the government. ⺠Quantity can constitute a dominant strategy equilibrium.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Marcella Scrimitore,