Original scientific paper

Privatization and environmental pollution in a mixed duopoly

Jiancai Pi ; School of Business, Nanjing University, Nanjing, Kina
Li Yang ; School of Business, Nanjing University, Nanjing, Kina
Yu Zhou ; School of Business, Nanjing University, Nanjing, Kina

Abstract

This paper establishes mixed duopoly game-theoretical models to investigate the economic impacts exerted by privatization in the presence of the environmental pollution. When the residents’ environmental preference is introduced to the public firm’s objective function, we mainly find that privatization may increase the public firm’s output, decrease the private firms’ outputs, and exert no impacts on social welfare. These findings run contrast to the common findings of the studies on privatization. Moreover, Cournot competition and Stackelberg competition are separately analyzed to show that our findings are robust and irrelevant with the firms’ moves. This paper highlights the role the environmental pollution and residents’ environmental preference play in determining the economic impacts
exerted by privatization.

Keywords

Privatization; mixed duopoly; environmental pollution; residents’ environmental preference; Cournot competition; Stackelberg competition

Hrčak ID:

112386

URI

https://hrcak.srce.hr/112386

Publication date:

20.12.2013.

Article data in other languages: croatian

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