Your browser does not support the PubReader view.
Go to this page to see a list of supporting browsers.
Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 13, No. 2, pp.107-122
ISSN: 1225-0279 (Print)
Print publication date 31 May 2000
Received Sep 1999 Revised Jan 2000

Optimal Trade Policy in an International Mixed Oligopoly

Nobuko Serizawa
Associate Professor, Faculty of Economics, Niigata University, Niigata, 9502181, Japan, Tel: +81-25-262-6568 serizawa@econ.niigata-u.ac.jp

JEL Classification: D43, F12, H20, L13, L32

Abstract

This paper investigates the effects of trade policies on the home country where homogeneous goods are supplied by a public firm, domestic private firms, and foreign private firms. It is shown that the home government always has an incentive to introduce positive tariffs in opening the economy regardless of whether there are public firms. Furthermore, if the optimal positive tariff is strategically introduced in privatizing the public firm, then privatization can improve welfare even when there are only a few firms in the market. This is in contrast to the existing literature that states that privatization worsens welfare in a closed mixed oligopoly with very few firms.

Keywords:

International mixed oligopoly, Trade policy, Privatization

Acknowledgments

The author expresses her profound gratitude to constructive comments by two anonymous referees.

References

  • Barros, F. “Incentive Schemes as Strategic Variables: An Application to a Mixed Duopoly.” International Journal of Industrial Organization 13 (No. 3 1995): 373-86. [https://doi.org/10.1016/0167-7187(94)00461-A]
  • Barros, F., and Modesto, L. “Portuguese Banking Sector: A Mixed Oligopoly?” International Journal of Industrial Organization 17 (No. 6 1999): 869-86. [https://doi.org/10.1016/S0167-7187(97)00064-7]
  • DeFraja, G., and Delbono, F. “Alternative Strategy of a Public Enterprise in Oligopoly.” Oxford Economic Papers 41 (No. 2 1989), 302-11. [https://doi.org/10.1093/oxfordjournals.oep.a041896]
  • Fershtman, C. “The Interdependence between Ownership Status and Market Structure: The Case of Privatization.” Economica 57 (No. 227 1990): 319-28. [https://doi.org/10.2307/2554937]
  • Fjell, K., and Pal, D. “A Mixed Oligopoly in the Presence of Foreign Private Firms.” Canadian Journal of Economics 24 (No. 3 1996): 737-43. [https://doi.org/10.2307/136260]
  • Okuguchi, K., and Serizawa, N. “Effects of Trade Policy for International Oligopoly.” Keio Economic Studies 33 (No. 2 1996): 13-22.
  • White, M. D. “Mixed Oligopoly, Privatization and Subsidization.” Economic Letters 53 (No. 2 1996): 189-95. [https://doi.org/10.1016/S0165-1765(96)00916-0]