Stackelberg Mixed Duopoly with a Foreign Competitor

Author: Matsumura T.

Source: Bulletin of Economic Research, Volume 55, Number 3, July 2003 , pp. 275-287(13)

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Abstract:

We investigate Stackelberg mixed duopoly models where a state-owned public firm and a foreign private firm compete. We examine a desirable role (either leader or follower) of the public firm. We also consider endogenous roles by adopting the observable delay game of Hamilton and Slutsky (1990). We find that, in contrast to Pal (1998) discussing a case of domestic competitors, the public firm should be the leader and that it becomes the leader in the endogenous role game. We also find that in contrast to Ono (1990) eliminating a foreign firm does not improve domestic welfare in mixed oligopolies.

Keywords: endogenous timing; mixed oligopoly; Stackelberg; H42; L13

Document Type: Research article

DOI: http://dx.doi.org/10.1111/1467-8586.00175

Affiliations: 1: University of Tokyo

Publication date: 2003-07-01