SUBSIDIZATION AND BARGAINING IN MIXED OLIGOPOLIES |
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Authors: | Cai Dapeng Li Jie |
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Institution: | 1. Institute for Advanced Research, Nagoya University, , Japan;2. School of Economics, Zhejiang University, , P. R. China |
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Abstract: | In this paper, we consider political interaction in a mixed oligopoly by characterizing how a subsidy is endogenously determined through the bargaining process between firms and politicians. We discuss how the nature of the political equilibrium changes with the type of competition, the specification of the cost function, and the timing of the game. We show that when bargaining between firms and politicians takes place, the resulting social welfare may be even worse than that under a public firm monopoly. |
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Keywords: | bargaining mixed market subsidization L32 P20 |
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