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Privatization in oligopoly: the impact of the shadow cost of public funds

De Feo, Giuseppe and Capuano, Carlo (2008) Privatization in oligopoly: the impact of the shadow cost of public funds. Working paper. Università degli Studi di Salerno.

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    Abstract

    The aim of this paper is to investigate the welfare eect of privatization in oligopoly when the government takes into account the distortionary eect of rising funds by taxation (shadow cost of public funds). We analyze the impact of the change in ownership not only on the objective function of the rms, but also on the timing of competition by endogenizing the determination of simultaneous (Nash-Cournot) versus sequential (Stackelberg) games. We show that, absent effciency gains, privatization never increases welfare. Moreover, even when large effciency gains are realized, an ineffcient public rm may be preferred.

    Item type: Monograph (Working paper)
    ID code: 7780
    Notes: Università degli Studi di Salerno – Dipartimento di Scienze Economiche e Statistiche Working Paper, No. 3.195. Also published as an article: http://strathprints.strath.ac.uk/28116/ This is a variant record V of: 28116
    Keywords: mixed oligopoly, privatization, endogenous timing, distortionary taxes, Commerce
    Subjects: Social Sciences > Commerce
    Department: Strathclyde Business School > Economics
    Related URLs:
    Depositing user: Strathprints Administrator
    Date Deposited: 26 Mar 2009 12:09
    Last modified: 06 Sep 2014 13:56
    URI: http://strathprints.strath.ac.uk/id/eprint/7780

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