Mixed Duopoly with Product Differentiation: Sequential Choice of Location

Authors: Matsumura, Toshihiro¹; Matsushima, Noriaki²

Source: Australian Economic Papers, Volume 42, Number 1, March 2003 , pp. 18-34(17)

Publisher: Blackwell Publishing

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Abstract:

We investigate the sequential choice of location in a mixed duopoly, where a welfare-maximising public firm competes against a profit-maximising private firm. We examine the desirable role of the public firm in a mixed market. We also consider the effect of price regulation. We find that the public firm should become the follower (leader) if a price regulation is (is not) imposed. We also find that neither price regulation nor privatisation of the public firm improves welfare.

Document Type: Research article

DOI: 10.1111/1467-8454.00183

Affiliations: 1: University of Tokyo matsumur@iss.u-tokyo.ac.jp 2: Shinshu University nmatsush@econ.shinshu-u.ac.jp

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