Privatization and government preference in a public Stackelberg leader duopoly

We analyse the relationship between the privatization of a public firm and government preferences for tax revenue in a Stackelberg duopoly with the public firm as the leader. We assume that the government payoff is given by a weighted sum of tax revenue and the sum of consumer and producer surplus....

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Bibliographic Details
Published in2012 IEEE 4th International Conference on Nonlinear Science and Complexity pp. 87 - 90
Main Authors Ferreira, F. A., Ferreira, F.
Format Conference Proceeding
LanguageEnglish
Published IEEE 01.08.2012
Subjects
Conferences
Games
Government
Linear programming
Oligopoly
Privatization
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ISBN9781467327022
1467327026
DOI10.1109/NSC.2012.6304731

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Summary:We analyse the relationship between the privatization of a public firm and government preferences for tax revenue in a Stackelberg duopoly with the public firm as the leader. We assume that the government payoff is given by a weighted sum of tax revenue and the sum of consumer and producer surplus. We get that if the government puts a sufficiently larger weight on tax revenue than on the sum of both surpluses, it will not privatize the public firm. In contrast, if the government puts a moderately larger weight on tax revenue than on the sum of both surpluses, it will privatize the public firm.
ISBN:9781467327022
1467327026
DOI:10.1109/NSC.2012.6304731