Price control and privatization in a mixed duopoly with a public social enterprise

Chih Wei Chang, Dachrahn Wu, Yan Shu Lin

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

We explore the issue of the optimal degree of privatization for a public firm that does not need to care about its rival’s profit completely. We find that the optimal privatization of a public social enterprise under exogenous price control depends on the level of the regulated price. Namely, when the regulated price is low (medium, high), the optimal privatization is partial privatization (complete privatization, completely public owned). If the price control is optimized by maximizing social welfare, then the optimal privatization is complete privatization. For the case of the traditionally defined public firm, its optimal privatization is completely public owned when the price control is exogenously given. If the price control is endogenously determined, then privatization policy is redundant.

Original languageEnglish
Pages (from-to)57-73
Number of pages17
JournalJournal of Economics/ Zeitschrift fur Nationalokonomie
Volume124
Issue number1
DOIs
StatePublished - 1 May 2018

Keywords

  • Privatization
  • Product quality
  • Public social enterprises

Fingerprint

Dive into the research topics of 'Price control and privatization in a mixed duopoly with a public social enterprise'. Together they form a unique fingerprint.

Cite this