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MARKET‐DEMAND BOOSTING AND PRIVATIZATION IN A MIXED DUOPOLY
Author(s) -
Han Lihua,
Ogawa Hikaru
Publication year - 2012
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.2010.00372.x
Subject(s) - boosting (machine learning) , duopoly , economics , microeconomics , limiting , consumer demand , on demand , industrial organization , commerce , computer science , cournot competition , mechanical engineering , machine learning , engineering
This study incorporates demand‐boosting strategies into a mixed duopoly model in order to consider the endogenous determination of market demand. The results indicate equilibrium characteristics that differ from those found under an exogenous demand setting. As consumers become more sensitive to the demand‐boosting strategies of firms, the government must choose a lower level of privatization. This suggests that the responsiveness of consumer demand to the demand‐boosting strategies of firms constitutes a limiting factor for privatization.