Mixed oligopoly and spatial price discrimination with foreign firms

Heywood, John and Ye, Guangliang (2009) Mixed oligopoly and spatial price discrimination with foreign firms. Regional Science and Urban Economics, 39 (5). pp. 592-601. ISSN 0166-0462

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Abstract

This paper is the first to examine the welfare consequences of foreign competition in a mixed oligopoly set in a linear model of spatial price discrimination. It demonstrates that the entry of a foreign firm often lowers domestic welfare. This results because the public firm locates largely independently of the presence of the foreign firm and because the profit earned by the foreign firm reduces domestic welfare. Privatization of the public firm typically lowers domestic welfare but can increase global welfare. Thus, domestic governments are unlikely to allow foreign entry and when they do, they are unlikely to privatize the public firm despite the potential rise in global welfare.

Item Type:
Journal Article
Journal or Publication Title:
Regional Science and Urban Economics
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/3300/3322
Subjects:
ID Code:
64915
Deposited By:
Deposited On:
10 Jun 2013 18:58
Refereed?:
Yes
Published?:
Published
Last Modified:
12 Aug 2020 03:01