Partial Privatization in Price-Setting Mixed Duopolies with Complementary Goods

Kazuhiro Ohnishi

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DOI: 10.4236/me.2011.21007                

Abstract

We consider a domestic (resp. international) mixed duopoly model in which a domestic public firm and a domestic (resp. foreign) private firm produce complementary goods. First, the domestic government chooses the level of privatization to maximize domestic social welfare. Second, observing the level of privatization, the firms simultaneously and independently choose prices. We present the equilibrium outcomes of the two mixed duopoly models and shows that our result is in marked contrast to that of the price-setting mixed du-opoly model with substitute goods.

Keywords

Partial Privatization, Price-Setting Model, Domestic Mixed Duopoly, International Mixed Duopoly, Complementary Goods

Conflicts of Interest

The authors declare no conflicts of interest.

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