Partial privatization in an international mixed oligopoly under product differentiation
Journal of Economics 131: 77-100 (2020)
Resumen
[EN]We consider an international mixed market that comprises two countries, each of
which owns one public firm and one private firm. As a benchmark case, we consider
a single country that owns all four firms. In both cases, governments decide whether
to partially privatize their public firms or not. Under an international mixed market
privatization decisions are driven by strategic reasons, while in the benchmark case
they are driven by efficiency reasons. We find that whether governments privatize
more or less in the former case than in the latter depends on the type of goods
produced by the firms (homogeneous, independent in demand, complements and
substitutes). We also find that social welfare may be greater under an international
mixed market than in the benchmark case. Finally, under an international mixed
market there is more privatization when each public firm produces the same good as
the domestic private firm than when they produce different goods