We investigate a mixed market where a state-owned welfare-maximizing public firm competes against profit-maximizing private firms. We use a circular city model with quantity-setting competition. In contrast to a pure market case discussed by Pal (1998a), spatial agglomeration of private firms...

Should civil servants (employees in the public sector) be allowed to bargain collectively? To answer this question, we construct a model of unionized mixed duopoly and examine the regulatory framework of public institutions, especially focusing on a wage regulation imposed on the public firm....