Abstract
In order to analyze the optimal degree of privatizing an upstream public firm, this paper sets up a vertically related market that consists of an upstream mixed oligopoly with one public firm and m private firms and a downstream oligopoly with n private firms. The major findings of this paper areas follows: If the marginal production cost of input increases slowly (rapidly), then the optimal degree for privatizing a public upstream firm increases (decreases) with the number of downstream firms. If the marginal production cost of input increases moderately, then the optimal degree for privatizing the public upstream firm first increases and then decreases with the number of downstream firms. If the marginal production cost of input is constant, then the optimal degree for privatizing a public upstream firm always increases with the number of downstream firms.
Original language | English |
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Pages (from-to) | 89-108 |
Number of pages | 20 |
Journal | Hitotsubashi Journal of Economics |
Volume | 55 |
Issue number | 1 |
DOIs | |
State | Published - 1 Jun 2014 |
Keywords
- Intermediate goods
- Mixed oligopoly
- Privatization
- Vertically related market upstream market