Premium
ON THE ROBUSTNESS OF PRIVATE LEADERSHIP IN MIXED DUOPOLY
Author(s) -
MATSUMURA TOSHIHIRO,
OGAWA AKIRA
Publication year - 2010
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.1467-8454.2010.00393.x
Subject(s) - cournot competition , robustness (evolution) , private sector , microeconomics , business , profit (economics) , transactional leadership , economics , management , biochemistry , chemistry , gene , economic growth
We investigate a mixed duopoly where a state‐owned public enterprise competes against a profit‐maximising private enterprise. We analyse whether private leadership or public leadership is robust in the observable delay game. We find that private leadership is always risk dominant. We also investigate how ownership structure in a public firm affects the equilibrium distribution of roles. We find that the roles are as follows: (1) Cournot, when the degree of privatisation is low, (2) private leadership, when it is middle, (3) both private leadership and public leadership, when it is high. The result implies that private leadership is again more robust.