Welcome Tp CRETA! Contact Us at : +886.2.3366.1072
Considering partial privatization of a public firm, this paper investigates the relative merits in terms of firms’ profits and welfare between Bertrand and Cournot outcomes in a mixed duopoly. We find that under partial privatization, the welfare is higher under Cournot competition than under Bertrand competition if product differentiation is large. We also show that if the degree of privatization is sufficiently high, Cournot competition yields higher profit for the private firm.