Yasuhiko Nakamura

Competition and Privatisation Policies in a Differentiated Mixed Oligopoly: The Pay-off-interdependence Approach: COMPETITION AND PRIVATISATION

I revisit the relationship between competition and privatisation policies in a mixed oligopoly with differentiated goods, following the pay†off†interdependence approach in the fashion of Matsumura and Okamura. We find that although the intensity of market competition increases with the degree of importance of each firms relative performance, the optimal degree of privatisation can decrease in a differentiated goods mixed oligopoly in both the increasing marginal costs case and the constant marginal costs case. Further, given the degree of importance of each firms relative performance and the number of private firms, we find that the optimal degree of privatisation can decrease as the degree of product differentiation declines. Finally, by considering an alternative†pay†off model in both cases, we compare the optimal degree of privatisation of the public firm.

Choosing Price or Quantity? The Role of Delegation and Network Externalities in a Mixed Duopoly

This paper considers a differentiated goods managerial mixed duopoly composed of one social welfare-maximising public firm and one profit-maximising private firm. We model the firm choice of the strategic contract. We find that when the strength of network effects is sufficiently strong, the price competition can become the unique equilibrium market structure. Furthermore, we show that there exists an area of the degree of product differentiation and the strength of network effects such that the situation wherein the public firm chooses its price contract whereas the private firm chooses its quantity contract can become the unique equilibrium structure.