Premium
Endogenous Role in Mixed Markets: A Two‐Production‐Period Model
Author(s) -
Matsumura Toshihiro
Publication year - 2003
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2003.tb00578.x
Subject(s) - stackelberg competition , duopoly , production (economics) , economics , microeconomics , outcome (game theory) , mixed economy , market economy , cournot competition
In this paper, I investigate endogenous roles in a mixed duopoly, where private and state‐owned public turns compete, by allowing two production periods. I find that many equilibria exist, including the Coumot‐type equilibrium and one Stackelberg‐type equilibrium where the public firm becomes the follower. However, another Stackelberg‐type equilibrium where the public firm becomes the leader does not exist. If small inventory costs are introduced, the unique equilibrium outcome becomes the Stackelberg type where the public firm is the follower.