Partial Privatization with Endogenous Choice of Strategic Variable

Novo Peteiro, José; Méndez Naya, José

Use this link to cite:

http://hdl.handle.net/2183/35487

Partial Privatization with Endogenous Choice of Strategic Variable

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Méndez_Naya_Jose_y_Novo_Peteiro_Jose_Antonio_2023_Partial_privatization_with_endogenous_choice_of_strategic_variable.pdf (4.22 MB)

Identifiers

URI: http://hdl.handle.net/2183/35487

Publication date

2023

Authors

Novo Peteiro, José

Méndez Naya, José

Bibliographic citation

Méndez-Naya, J., & Novo-Peteiro,J. A. (2023). Partial privatization with endogenous choice ofstrategic variable.Managerial and Decision Economics,44(2),1215–1227.https://doi.org/10.1002/mde.3743

Abstract

[Abstract] This paper analyzes the optimal privatization policy when firms endogenously choose their strategic variable. The level of privatization is shown to determine: (i) the choice of strategic variable, whereby an asymmetric equilibrium could emerge (either Cournot–Bertrand or Bertrand–Cournot); (ii) the stability of equilibrium when the partially privatized firm and the private firm choose quantity and price respectively as the strategic variable; and (iii) the level of welfare, whereby Cournot–Cournot and Bertrand–Cournot games could lead to a greater welfare than the Bertrand–Bertrand model