Tuesday, September 22, 2009
Posted by D. Daniel Sokol
Prabal Roy Chowdhury has written on Mixed Duopoly with Price Competition.
ABSTRACT: This paper examines coalition-proof Nash equilibria (CPNE) of a mixed duopoly with price competition where the public firm meets all the demand coming to it. If the private firm is free to supply less than demand, then the unique CPNE involves the competitive price. If however the private firm also has to supply all its demand, then the set of CPNE prices turns out to be an interval, with prices ranging from the socially optimal one, to the price under complete privatization.