University of St.Gallen
research platform alexandria
search publications
browse publications
by person
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
 
by year

Demand-Enhancing Investment in Mixed Duopoly

Stefan Bühler & Simon Wey

fulltext etc. no fulltext attached
abstract This paper examines demand-enhancing investment and pricing in mixed duopoly. We analyze a model with differentiated products and reduced-form demand, making no assumptions on the relative efficiency of the public firm. First, we derive sufficient conditions for public investment to crowd out private investment. Second, we characterize the conditions under which individual investments (prices, respectively) in the mixed duopoly are higher (lower) than in the standard duopoly. Third, we show that with linear demand the public firm effectively disciplines the private firm, inducing an improvement in its price-quality ratio relative to the standard duopoly.
   
type working paper (English)
   
keywords Mixed oligopoly, price, investment, quality
   
date of appearance 2010
publisher University of St. Gallen, Department of Economics Discussion Paper 2010- 16
review not reviewed
   
citation Bühler, S., & Wey, S. (2010). Demand-Enhancing Investment in Mixed Duopoly: University of St. Gallen, Department of Economics Discussion Paper 2010- 16.