An International Mixed Oligopoly with Multiple Public Firms

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  • HAN Lihua
    Graduate School of Economics, Nagoya University

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The analyses described in this paper address an international mixed oligopoly model with multiple public firms to clarify equilibrium properties and derive policy implications. The results show a possible increase in social welfare relative to a single public firm and provide a rationale for active open-door policies to allow foreign firms to enter Chinese markets. Results also indicate that entry of a new public firm may increase the profits of public incumbents if the public firms are as cost-efficient as the private firms. It is surprising that adding a firm increases the profits of other firms in this Cournot-Nash Model.<br><br>JEL Classification: D43, L13, L32

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