We investigate a mixed duopoly, where a state-owned welfare-maximizing public firm competes against a profit-maximizing private firm. We use a Hotelling-type spatial model which represents product differentiation. We endogenize production costs by introducing cost-reducing activities. We show...

We investigate the sequential choice of location in a mixed duopoly, where a welfare-maximising public firm competes against a profit-maximising private firm. We examine the desirable role of the public firm in a mixed market. We also consider the effect of price regulation. We find that the...