mixed duopoly, endogenous timing, L00, L30,

The literature on mixed oligopoly does not consider the role that the environmental policy of the government plays on the decision whether to privatize public firms. Assuming that there are one public firm and n private firms and that the government chooses an environmental standard we show that, when the number of private firms is low enough, the public firm is privatized if it is inefficient enough. When the number of private firms is high enough, the government always privatizes the public firm. We also show that the range of values of the parameters for which the government privatizes the public firm is greater than when environmental policy is not considered.

The literature on mixed oligopoly does not consider the strategic interaction between governments when they decide whether to privatize their publicly-owned firms. In order to analyze this question, we consider two countries and assume that publicly-owned firms are less efficient than private firms. We obtain that when the marginal cost of the publicly-owned firms takes an intermediate value, each government wants it to be the government of the other country that privatizes its publicly-owned firm. In this case, only one government privatizes, and that government obtains lower social welfare and producer surplus than the other. Copyright Blackwell Publishing Ltd 2005.

mixed duopoly, merger, multiproduct firm, L00, L13, L33,

No abstract