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Kangsik Choi
''Privatization and Government's Preference under Mixed Oligopoly: A Generalization''
( 2009, Vol. 29 No.2 )
In this paper, we generalize Kato's (Economics Bulletin, 2008) model by allowing many private firms in the mixed oligopoly setting, rather than the mixed duopoly framework of Kato (2008). By introducing the government's preference for tax revenues into the theoretical framework of mixed oligopoly, we show that Kato's results are robust when there are many private firms. That is, as the number of private firms increases, both total output and the government's payoff in the mixed oligopoly are larger than those in the private oligopoly if and only the weight of the government's preferences on tax revenues increases and vice versa.
Keywords: Government's preference, social welfare, tax, privatization
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
H2 - Taxation, Subsidies, and Revenue: General
Manuscript Received : Feb 03 2009 Manuscript Accepted : May 05 2009

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