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


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
Issue number1
StatePublished - 1 May 2018


  • Privatization
  • Product quality
  • Public social enterprises


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