The endogenous objective function of a partially privatized firm: A Nash bargaining approach

Yoshio Kamijo, Yoshihiro Tomaru

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

We establish a model wherein a private firm competes with a partially privatized firm whose objective function is endogenously determined through bargaining between owners-the welfare-maximizing government and dividend-maximizing private shareholders. Many existing works on partial privatization have assumed that privatization increases the weight of profits in the partially privatized firm's objective, whereas it decreases the weight of welfare. However, our bargaining approach shows that this result can be reversed.

Original languageEnglish
Pages (from-to)101-109
Number of pages9
JournalEconomic Modelling
Volume39
DOIs
Publication statusPublished - 2014 Apr
Externally publishedYes

Keywords

  • Bargaining
  • Mixed duopoly
  • Nash solution
  • Partial privatization

ASJC Scopus subject areas

  • Economics and Econometrics

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