Endogenous timing in a mixed duopoly

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• 作者：Rabah Amir (1)
  Giuseppe De Feo (2) (3)
  
• 关键词：Mixed markets ; Endogenous timing ; Cournot equilibrium ; Stackelberg equilibrium ; Privatization ; C72 ; D43 ; H42 ; L13
• 刊名：International Journal of Game Theory
• 出版年：2014
• 出版时间：August 2014
• 年：2014
• 卷：43
• 期：3
• 页码：629-658
• 全文大小：426 KB
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• 作者单位：Rabah Amir (1)
  Giuseppe De Feo (2) (3)
  
  1. Department of Economics, The University of Iowa, Iowa City, IA, 52242-1994, USA
  2. Department of Economics, University of Strathclyde, Glasgow, UK
  3. Dipartimento di Scienze Economiche e Aziendali, Università degli Studi di Pavia, Pavia, Italy
  
• ISSN：1432-1270

文摘

This paper applies the framework of endogenous timing in games to mixed quantity duopoly, wherein a private—domestic or foreign—firm competes with a public, welfare-maximizing firm. A central goal of the paper is to present a unified and general treatment of the basic question of what constitutes the appropriate solution concept—Cournot or Stackelberg—in such duopolies. We show that simultaneous play never emerges as a subgame-perfect equilibrium of the extended game, in sharp contrast to private duopoly games. We demonstrate that this result is due to the objective function of the public firm being increasing in the rival’s output (instead of decreasing for a private firm). We provide sufficient conditions for the emergence of public and/or private leadership equilibrium. In all cases, private profits and social welfare are higher than under the corresponding Cournot equilibrium. We make extensive use of the basic results from the theory of supermodular games in order to avoid common extraneous assumptions such as concavity, existence and uniqueness of the different equilibria, whenever possible. Some policy implications are drawn, in particular those relating to the merits of privatization.