In this paper we investigate tax/subsidy competition for FDI between countries of different size when a welfare-maximizing and relatively inefficient public firm is the incumbent in the largest market. First, we analyze how the presence of a public firm affects the investment decision of a...

This paper addresses the issue of endogenizing the equilibrium solution when a private - domestic or foreign - firm competes in the quantities with a public, welfare maximizing firm. Theoretical literature on mixed oligopolies, in fact, provides results and policy implications that crucially...

The purpose of this paper is to investigate the effect of privatization in a mixed duopoly, where a private firm competes in quantities with a welfare-maximizing public firm. We consider two inefficiencies of the public sector: a possible cost inefficiency, and an allocative inefficiency due to...

There is a general presumption that competition is a good thing. In this paper we show that competition in the insurance markets can be bad when there is adverse selection. Using the dual theory of choice under risk, we are able to fully characterize both the competitive and the monopoly market...

In the theoretical literature, strong arguments have been provided in support of the efficiency defense in antitrust merger policy. One of the most often cited results is due to Williamson (1968) that shows how relatively small reduction in cost could offset the deadweight loss of a large price...

In this paper, we provide an explanation of why privatization may attract foreign investors interested in entering a regional market. Privatization turns the formerly-public firm into a less aggressive competitor since profit- maximizing output is lower than the welfare-maximizing one. The...

In this paper we investigate tax/subsidy competition for FDI between countries of different size when a domestic firm is the incumbent in the largest market. We investigate how the nature (public or private) of the incumbent firm affects policy competition between the two governments seeking to...

This paper applies the framework of endogenous timing in games to mixed quantity duopoly, wherein a private - domestic or foreign - firm competes with a public, welfare maximizing firm. We show that simultaneous play never emerges as a subgame-perfect equilibrium of the extended game, in sharp...

This paper applies the framework of endogenous timing in games to mixed quantity duopoly, wherein a private domestic or foreign firm competes with a public, welfare maximizing firm. We show that simultaneous play never emerges as a subgame-perfect equilibrium of the extended game, in sharp...

In this paper we investigate tax/subsidy competition for FDI between countries of different size when a domestic firm is the incumbent in the largest market. We investigate how the nature (public or private) of the incumbent firm affects policy competition between the two governments seeking to...