Social Performance Management in Mixed Oligopolies with Externalities : New Policy Mixes for Public Firms

The purpose of this study is to analyze two models of mixed oligopolies with a singe public firm who takes the extra care of attaining a social goal (reduction of environmental damage). We investigate the effect of such social performance management on the optimal privation policy in the mixed oligopolies. In the Cournot competition, introducing the social performance management decreases the total environmental damage from the industry and improves social welfare. The optimal privatization policy in the Cournot competition varies depending on the number of private firms in the market. In the Stackelberg competition with the public firm taking the role of the leader, introducing the social performance management reduces social welfare and the optimal policy is not to privatize the public firm. On the other hand, both social welfare and environmental damage are higher in the Stackelberg competition without the social performance management than in the Cournot competition with the social performance management