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Privatization Policies by National and Regional Governments

Author

Listed:
  • Francisco Martínez-Sánchez

    (Departamento de Métodos Cuantitativos, para la Economía y la Empresa, Universidad de Murcia, 30100 Murcia, Spain)

Abstract
In order to analyze the privatization policies undertaken by the national and regional governments, I consider a horizontal differentiation model with price competition in which a country consists of two regions of different sizes. I show that public-sector intervention by either the national or regional government is essential for achieving the social optimum. The preferences of consumers and firms about privatization policy are completely opposite: consumers prefer a regional public-sector intervention, while firms prefer a national public-sector intervention. Finally, I find that the preferences of the two regions about market structures are also opposite: the least populated region prefers the private duopoly, while the most populated region prefers a government intervention in the market.

Suggested Citation

  • Francisco Martínez-Sánchez, 2022. "Privatization Policies by National and Regional Governments," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-23, June.
    • Handle: RePEc:wsi:igtrxx:v:24:y:2022:i:02:n:s0219198921500110
    DOI: 10.1142/S0219198921500110
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    References listed on IDEAS

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    More about this item

    Keywords

    Horizontal differentiation; national and regional governments; mixed duopoly; region size; partial privatization;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • R59 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Other

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