Alternative Strategies of a Public Enterprise in Oligopoly *

State-Owned Banks as Competition Enhancers, or the Grand Illusion

“…4 See Beato and Mas-Colell (1984) for a definition of the duopoly conditions under which marginal cost pricing is the best simple rule for a welfare-maximizing firm. De Fraja and Delbono (1989) show that in the context of a mixed Cournot oligopoly, the public firm does indeed choose an output such that its marginal cost equals price. Finally, Smith et al (1981) and Smith (1984) show that, under certain conditions, borrower-dominated credit unions follow a marginal-cost pricing rule.…”

“…For work on the value of state ownership in oligopolistic markets see, among others, DeFraja and Delbono (1989) orCremer et al (1989).3 According to the authors, only three studies, out of 52, compare the relative performance of publicly and privately owned banks based on prices. SeeShirley and Walsh (2000),Table 1, p. 50-51.…”

Mixed duopoly, inefficiency, and public ownership

“…Suppose the public firm's objective were to change from welfare-to profit-maximization ' Notice tbat the similar results obtained by De Fraja and Delbono (1989) in a model without cost asymmetries and witb increasing marginal costs are due to the altogether different reason of the &g/rer output produced by the Stackelberg public firm. * A note on truth-revelation.…”

Privatization of local public hospitals: effect on budget, medical service quality, and social welfare

“…De Fraja and Delbono (1989) were the first to investigate mixed markets, and many studies have since extended their model. 7 Most studies on mixed markets assume a single domestic market in which one public firm and several private firms compete, and they examine the effect of privatization of the public firm on social welfare (e.g., see Matsumura 1998).…”