Privatization and timing in a mixed oligopoly with both foreign and domestic firms

Heywood, John and Ye, Guangliang (2009) Privatization and timing in a mixed oligopoly with both foreign and domestic firms. Australian Economic Papers, 48 (4). pp. 320-332. ISSN 0004-900X

Abstract

This paper models a mixed oligopoly with both a domestic and a foreign private firm and examines the resulting timing in the quantity setting game. We demonstrate that with a single simultaneous pre-game delay stage, the resulting endogenous timing has either the public firm leading or the two private firms leading. An alternative characterisation of the pre-game stage results in the single timing in which the two private firms lead and the public firm follows. For all timings that emerge endogenously, we show that privatisation will always lower domestic welfare but its influence on global welfare is ambiguous.