Heywood, John and Ye, Guangliang (2009) Mixed oligopoly, sequential entry and spatial price discrimination. Economic Inquiry, 47 (3). pp. 589-597. ISSN 0095-2583
Full text not available from this repository.Abstract
This paper is the first to examine the welfare consequences of a public firm in a traditional model of spatial price discrimination. It demonstrates that when a private firm acts as a Stackelberg location leader, the presence of a public firm always improves welfare. Moreover, when three firms locate sequentially, the presence of a public firm improves social welfare unless it locates last. Thus, despite examining a variety of location timings, including simultaneous location, privatization never improves welfare and usually harms welfare. This conclusion differs from several currently in the literature in which privatization often improves welfare.