Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2021.1962385
Public monopoly versus mixed oligopoly: product differentiation and social efficiency
Jeong-Yoo Kim
Sažetak
In this paper, we consider a mixed oligopoly market in which a
public firm and private firms compete, in particular, in which private entrants are allowed to enter a monopoly market by a public
incumbent who maximizes social welfare. It has been widely
believed that the public firm has advantage over private firms
because the former who maximizes social welfare can charge a
lower price than the latter who maximizes its own profit.
However, in a Hotelling model of product differentiation, we
obtain the results that both the public firm and private firms
charge the same price in equilibrium, and more importantly, that
the equilibrium prices may rise as a result of competition, thereby
lowering the consumer surplus, if the transportation cost is high
enough. We also show that if a private firm enters the market by
choosing its own degree of differentiation, it will prefer neither
maximum differentiation nor minimum differentiation in the case
that the public incumbent is myopic in the sense that it cannot
anticipate entry as well as in the case that it is far-sighted enough
to anticipate entry. This draws an important policy implication in
the market of Korean housing guarantee services.
Ključne riječi
Mixed duopoly; housing guarantee; maximum differentiation; social welfare
Hrčak ID:
302044
URI
Datum izdavanja:
31.3.2023.
Posjeta: 193 *