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. 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.

    Author(s):Capuano, Carlo and De Feo, Giuseppe ORCID logoORCID: https://orcid.org/0000-0002-2085-1756
    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
    Keywords:mixed oligopoly, privatization, endogenous timing, distortionary taxes, Commerce, Social Sciences(all)
    Subjects:Social Sciences > Commerce
    Department:Strathclyde Business School > Economics
    Depositing user: Strathprints Administrator
    Date deposited:26 Mar 2009 12:09
    Last modified:02 Dec 2019 11:00
    Related URLs:
    URI:https://strathprints.strath.ac.uk/id/eprint/7780
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