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Price Competition in International Mixed Oligopolies

Author

Listed:
  • Alessandra Chirco

    (University of Salento, Lecce, Italy)

  • Marcella Scrimitore

    (University of Salento, Lecce, Italy; The Rimini Centre for Economic Analysis (RCEA), Rimini, Italy)

Abstract
In this paper we analyze the effects of international competition in a mixed oligopoly framework, with price competition and differentiated products. The properties of equilibria, and the impact of policy measures such as privatizations and cross-border acquisitions, are studied both in a single-country and in a two-country framework, under the hypothesis that all firms share the same linear technology. Besides showing that the international competition in a mixed market allows for efficiency gains which are consistent with binding budget constraints for the public firm, we identify the market structures and the competitive environment which support welfare enhancing privatization policies, independently of any exogenous or endogenous cost differential between public and private producers. In particular, we suggest that the cross-country distribution of firms, the degree of product substitutability and the overall density of the market are the key elements in the assessment of the desirability of public ownership.

Suggested Citation

  • Alessandra Chirco & Marcella Scrimitore, 2010. "Price Competition in International Mixed Oligopolies," Working Paper series 48_10, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:48_10
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    File URL: http://www.rcea.org/RePEc/pdf/wp48_10.pdf
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    References listed on IDEAS

    as
    1. Anderson, Simon P. & de Palma, Andre & Thisse, Jacques-Francois, 1997. "Privatization and efficiency in a differentiated industry," European Economic Review, Elsevier, vol. 41(9), pages 1635-1654, December.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alessandra Chirco & Marcella Scrimitore, 2017. "Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition," EERI Research Paper Series EERI RP 2017/06, Economics and Econometrics Research Institute (EERI), Brussels.

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    More about this item

    Keywords

    International mixed oligopoly; price competition; privatization;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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