What role should public firms play in the upstream market? |
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| Authors: | Yongfu Liang Leonard F S Wang Yapo Yang |
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| Institution: | 1. School of Economics and Commerce, Guangdong University of Technology, Guangzhou, China;2. Wenlan School of Business, Zhongnan University of Economics and Law, Wuhan, China;3. Institute of Business and Management, National University of Kaohsiung, Kaohsiung, Taiwan |
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| Abstract: | We investigate the upstream public firm's desirable option of production timing in the vertically related upstream market. We find that multiple equilibria may exist, including the Cournot-type and Stackelberg-type, with different degrees of privatization in the presence of upstream firms' efficiency gap. These equilibrium outcomes are also influenced by the intensity of downstream market competition. We further show the corresponding optimal degree of privatization in different phases of gradual privatization. |
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| Keywords: | endogenous timing mixed oligopoly optimal privatization vertically related market |
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