Bertrand-Edgeworth duopoly with a socially concerned firm

Nagy, Balázs and Tasnádi, Attila (2019) Bertrand-Edgeworth duopoly with a socially concerned firm. Working Paper. Corvinus University of Budapest Faculty of Economics, Budapest.

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The government may regulate a market by obtaining partial ownership in a firm. This type of socially concerned firm behaves as a combined profit and social surplus maximizer. We investigate the presence of a socially concerned firm in the framework of a Bertrand-Edgeworth duopoly with capacity constraints. In particular, we determine the mixed-strategy equilibrium of this game and relate it to both the standard and the mixed versions of the Bertrand-Edgeworth game. In contrast to other results in the literature we find that full privatization is the socially best outcome, that is the optimal level of public ownership is equal to zero.

Item Type:Monograph (Working Paper)
Series Name:Corvinus Economics Working Papers - CEWP
Series Number / Identification Number:2019/03
Uncontrolled Keywords:Bertrand-Edgeworth, mixed duopoly, semi-public firm, mixedstrategy equilibrium
JEL classification:D43 - Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
L13 - Oligopoly and Other Imperfect Markets
Funders:Pallas Athéné Domus Sapientiae Foundation Leading Researcher Program
ID Code:3982
Deposited By: Ádám Hoffmann
Deposited On:11 Mar 2019 12:10
Last Modified:11 Mar 2019 12:10

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