Details

MIXED OLIGOPOLY, ESSAY ON LOCATION AND CAPITAL OWNERSHIP

by Cardenas, Oscar Javier

Abstract (Summary)
We survey the literature on mixed oligopolies and detected that it has ignored, among other things, the effects resulting from changes in assets ownership as well as the location resulting when firms compete to set up their facilities and then they compete in quantities in a linear market. The former is important because decisions to increase the industry's stock of capital, the sale of it among firms, or its joint ownership, lead to different behavior and performance of the industry. Therefore, we investigate how the change in asset ownership affects price, firms' profit, welfare and industry concentration. We also analyze if there is a negative correlation between industry concentration and welfare. We find out that the direction in price changes, firms' profit and industry concentration depend on how asset ownership changes. Further more, we find no correlation between industry concentration and welfare. It has been shown in a private oligopoly, that if firms compete first in location choice, and then in quantities, they will choose to agglomerate at the market center. We investigate if the presence of a public firm breaks down this agglomeration. In our analysis of mixed duopoly we show that whether or not firms agglomerate, depends on the cost differential between the private and the public firm. No agglomeration results if the cost differential is small, i.e. c < 1/2, but it will emerge at the market center otherwise. We also show that some consumers, and the private firm, may be better off under a private duopoly than in a mixed duopoly.
Bibliographical Information:

Advisor:

School:University of Cincinnati

School Location:USA - Ohio

Source Type:Master's Thesis

Keywords:mixed oligopolies industrial organization location capital ownership

ISBN:

Date of Publication:01/01/2001

© 2009 OpenThesis.org. All Rights Reserved.