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Organizational Structure and the Choice of Price vs. Quantity in a Mixed Duopoly

By  |  September 5, 2013

Posted by D. Daniel Sokol

Alessandra Chirco (Universita del Salento, Italy), Caterina Colombo (Universita di Ferrara, Italy) and Marcella Scrimitore (Universita del Salento, Italy; The Rimini Centre for Economic Analysis, Italy) analyze Organizational Structure and the Choice of Price vs. Quantity in a Mixed Duopoly

ABSTRACT: We consider the choice of price/quantity by a public and a private firm in a mixed differentiated duopoly. First, we study the way in which the strategic choice of the market variable is affected by different given organizational structures (managerial or entrepreneurial) of the public and the private firm. Second, we investigate how the price/quantity choice interacts with the endogenous choice of the organizational structure, thus determining a subgame perfect equilibrium at which firms choose to behave as price-setters and to adopt a managerial structure.