This paper investigates the endogenous choice of the strategic variable, price or quantity, taken in a mixed duopoly by a public and a private firm prior to market competition. While Matsumura and Ogawa (2012) in a standard mixed duopoly find that price is the unique equilibrium, we show that, by introducing firm subsidization in the same setting, quantity can constitute a dominant strategy equilibrium. © 2012 Elsevier B.V.
Price or quantity? The strategic choice of subsidized firms in a mixed duopoly / Scrimitore, M.. - In: ECONOMICS LETTERS. - ISSN 0165-1765. - 118:2(2013), pp. 337-341. [10.1016/j.econlet.2012.11.015]
Price or quantity? The strategic choice of subsidized firms in a mixed duopoly
Scrimitore M.
2013-01-01
Abstract
This paper investigates the endogenous choice of the strategic variable, price or quantity, taken in a mixed duopoly by a public and a private firm prior to market competition. While Matsumura and Ogawa (2012) in a standard mixed duopoly find that price is the unique equilibrium, we show that, by introducing firm subsidization in the same setting, quantity can constitute a dominant strategy equilibrium. © 2012 Elsevier B.V.File in questo prodotto:
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