We analyze privatization in a differentiated oligopoly setting with a domestic public firm and foreign profit-maximizing firms. In particular, we examine pricing below marginal cost by public firm, the optimal degree of privatization and, the relationship between privatization and foreign...

We address two questions. First, does the excess entry result of pure oligopoly hold when firms face a substitute good produced by a public firm? Second, what would be the optimal ownership of the public firm? We find that excess entry still occurs, but the excessiveness is largely mitigated due...