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

Capuano, Carlo and De Feo, Giuseppe (2008) Privatization in oligopoly : the impact of the shadow cost of public funds. Preprint / 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.

ORCID iDs

De Feo, Giuseppe ORCID: https://orcid.org/0000-0002-2085-1756

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• Item metadata

  Item type:	Monograph(Preprint / Working Paper)
  ID code:	7780
  Dates:	Date Event 2008 Published
  Notes:	Università degli Studi di Salerno – Dipartimento di Scienze Economiche e Statistiche Working Paper, No. 3.195. Also published as an article
  Subjects:	Social Sciences > Commerce
  Department:	Strathclyde Business School > Economics
  Depositing user:	Strathprints Administrator
  Date deposited:	26 Mar 2009 12:09
  Last modified:	03 Dec 2024 01:08
  Related URLs:	Strathprints record
  URI:	https://strathprints.strath.ac.uk/id/eprint/7780