Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result for the general case

It is proved that the irrelevance result of Poyago-Theotoky can be extended from the linear-quadratic case to general inverse demand and cost functions. Hence, as long as firms are profitable at the first-best, the optimal subsidy decentralizes it in mixed oligopoly irrespecitve of whether the public firm maximizes welfare or profit and moves simultaneously with private firms, or maximizes welfare and acts as a Stackelberg leader.

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Year of publication:	2002-01-16
Authors:	Myles, Gareth
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 12.2002, 1, p. 1-6
Publisher:	AccessEcon
Subject:	first-best

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Extent:	application/pdf
Type of publication:	Article
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; H2 - Taxation, Subsidies, and Revenue
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005094631