Privatization: Do prices rise or fall? Mixed duopoly with vertical differentiation

  • Julio César Arteaga García Universidad Autónoma de Nuevo León
  • Oscar J. Cárdenas Rodríguez Universidad de Guanajuato
  • Daniel Flores Curiel Universidad Autónoma de Nuevo León
DOI: https://doi.org/10.24201/ee.v19i2.175
Keywords: duopoly, privatization
JEL Classification: L13, L33

Abstract

In this paper, we use a duopoly model with vertical (quality) product differentiation to determine whether privatization of a public firm leads to higher or lower prices than those prevailing in a mixed duopoly. We show that privatization can move prices on either direction.

References

Anderson, S., A. de Palma y J. Thisse (1997), “Privatization and efficiency in a differentiated industry”, European Economic Review, vol. 41, pp. 1635-1654.

Beato, P., y A. Mas-Colell (1984). “The marginal cost pricing as a regulation mechanism in mixed markets” en M. Marchand y H. Tulkens (comps.), Performance of public enterprises, Nort-Holland, Amsterdam.

Cremer, H., M. Marchand y J. Thisse (1991). “Mixed oligopoly with differentiated products”, International Journal of Industrial Organization, vol. 9, pp. 43-53.

De Fraja, G. y F. Delbono (1990). “Game theoretic models of mixed oligopoly”, Journal of Economics Surveys, vol. 4, pp. 1-17.

Grilo, I. (1994). “Mixed duopoly under vertical differentiation”, Annales d´Economie et de Statistique, vol. 33, pp. 91-112.

Harsanyi, J. (1980). “Cardinal welfare, individualistic ethics and interpersonal comparison of utility”, Journal of Political Economy, vol. 63, pp. 309-321.

Matsushima, N. y T. Matsumura (2003). “Mixed oligopoly and spatial agglomeration”, Canadian Journal of Economics, vol. 36, pp. 62-87.

Merrill, W. y N. Schneider (1996). “Government firms in oligopoly: a short run analysis”, Quarterly Journal of Economics, vol. 84, pp. 400-412.

Tirole, J. (1988). The Theory of Industrial Organization, MIT Press, Cambridge.

Published
01-07-2004
How to Cite
Arteaga García, J., Cárdenas Rodríguez, O., & Flores Curiel, D. (2004). Privatization: Do prices rise or fall? Mixed duopoly with vertical differentiation. Estudios Económicos, 19(2), 141-157. https://doi.org/10.24201/ee.v19i2.175
Issue
38-vol. 19, no. 2, july-december, 2004
Section
Articles