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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 29, No. 2, pp.165-180
ISSN: 1225-0279 (Print)
Print publication date 30 May 2016
Received 27 Aug 2014 Revised 23 Sep 2015 Accepted 08 Oct 2015

Price Competition in a Mixed Oligopoly Market

Amarjyoti Mahanta
Assistant Professor, Centre for Development Studies, Prasanth Nagar, UlloorKerala, 695011, India, Tel: +91-808-9735892, Fax: +91-471-2447137 amarjyotimahanta@gmail.com

JEL Classification: L13, L32, L33

Abstract

Several studies on mixed oligopoly indicate that the ownership pattern of firms does not affect the equilibrium price. This idea often suggests that ownership is irrelevant. In a mixed duopoly under price competition, firm ownership is irrelevant. This study reveals that ownership is irrelevant in a single publicly owned firm and in any positive number of privately owned firms. However, if two or more publicly owned firms exist, then ownership becomes relevant in a homogeneous good market with a strictly increasing convex cost schedule and a downward sloping demand curve. If firms set the price sequentially and if the lone public firm is a price leader, then social welfare is constantly greater than when the latter is a price follower. The unique price is the competitive price when the public firm moves first in the sequential game.

Keywords:

Mixed oligopoly, Price competition

Acknowledgments

This paper is based on a chapter from my PhD dissertation. I am grateful to my supervisors, namely, Professor Anjan Mukherji and Professor Krishnendu Ghosh Dastidar. I also express my gratitude to the participants of the seminar held at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, particularly to Dr. Taposik Banerjee, for their useful comments. My appreciation also goes to Professor P. G. Babu, Professor Uday Bhanu Sinha, Dr. Ragupathy V., and Dr. Srobonti Chattopadhyay for their invaluable comments. Furthermore, I extend my gratitude to the referee of this journal for the valuable suggestions and comments. The usual disclaimer applies.

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