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MIXED OLIGOPOLY IN A SINGLE INTERNATIONAL MARKET *
Author(s) -
DADPAY ALI,
HEYWOOD JOHN S.
Publication year - 2006
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.2006.00292.x
Subject(s) - oligopoly , welfare , market structure , domestic market , business , economics , market economy , microeconomics , industrial organization , international economics , international trade
This paper departs from previous literature by considering a mixed oligopoly with two countries each with public and private firms competing in a single market. This differs from the traditional framework of examining a single domestic market in which foreign and domestic firms compete and is motivated, in part, by international airline markets but serves to characterise many markets. The resulting equilibrium emphasises that the strategic interaction of the two public firms usually serves to reduce welfare. Thus, the usual reason to imagine a public firm in a mixed oligopoly, to enhance welfare, is lost when such firms compete in the interest of their respective countries.