Economics
Kazuhiro Ohnishi
Abstract
This paper uses a mixed market model in which a state-owned public firm and a private firm produce complementary goods and reassesses the welfare effects of production subsidies. The paper examines four regimes: mixed and private duopoly, each with and without subsidies. In the regimes without subsidies, ...
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This paper uses a mixed market model in which a state-owned public firm and a private firm produce complementary goods and reassesses the welfare effects of production subsidies. The paper examines four regimes: mixed and private duopoly, each with and without subsidies. In the regimes without subsidies, a one-shot Cournot-Nash game is considered. In the regimes with subsidies, the following two-stage game is considered: At the first stage the government chooses the subsidy level to maximize social welfare, and at the second stage each firm observes the subsidy and simultaneously chooses its output level. The paper presents the following two main results. First, if production subsidies are used only before privatization, then there is a reduction in social welfare. Second, if production subsidies are used before and after privatization, then social welfare is not changed by privatization. The paper finds that the results are the same as those obtained by White (1996) that examines the welfare effects of production subsidies in a Cournot mixed market with homogeneous goods.
Economics
Kazuhiro Ohnishi
Abstract
The seminal work by White (1996) examines the welfare effects of production subsidies in a mixed Cournot oligopoly market where a state-owned public firm competes with fully domestic-owned private firms, and presents the following two main results. First, if production subsidies are utilized only before ...
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The seminal work by White (1996) examines the welfare effects of production subsidies in a mixed Cournot oligopoly market where a state-owned public firm competes with fully domestic-owned private firms, and presents the following two main results. First, if production subsidies are utilized only before privatization, domestic economic welfare is always lowered by privatization. Second, if production subsidies are utilized before and after privatization, then domestic economic welfare is not changed by privatization. This paper examines the welfare effects of production subsidies in a mixed Cournot duopoly model where a state-owned public firm competes with a private firm that is partially foreign owned. The paper presents the following two main results. First, if subsidies are used only before privatization, then there is a reduction in domestic economic welfare. Second, if subsidies are used before and after privatization, then domestic economic welfare is raised by privatization. The paper finds that the second result is in contrast with that obtained by White (1996).
Leila Sedighikamal; Ghodratollah Talebnia
Volume 1, Issue 1 , August 2014, , Pages 81-92
Abstract
Privatization has become a popular panacea for solving the organizational problems of governments by reducing the role of the state and encouraging the growth of the private sector enterprises. However, privatization takes a number of forms and has been approached in various ways during the move away ...
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Privatization has become a popular panacea for solving the organizational problems of governments by reducing the role of the state and encouraging the growth of the private sector enterprises. However, privatization takes a number of forms and has been approached in various ways during the move away from state control to other forms of ownership in developing and industrialized countries. Based on Iranian constitution, No.144, public companies must change to the private companies. The government of Iran urgently needs expanded and more dynamic private sectors, more efficient and effective infrastructure/utility provision, and increased investment from both domestic and foreign sources. The most important purpose of privatization in Iran is increasing the proficiency. In this article we will discuss about the reasons of this policy, forms and trends, privatization process and volume will be surveyed, article 44 and at the end performance of the government on privatization will be explained.