Authors: John S Heywood Guangliang Ye
Publish Date: 2010/07/30
Volume: 101, Issue: 3, Pages: 231-246
Abstract
We show that partially privatizing a public firm alters underlying conjectures in turn changing the optimal degree of privatization The consistent conjectures equilibrium CCE generates substantially greater optimal privatization than does any conjecture shared between the firms including the standard Cournot–Nash equilibrium CNE Yet when the private rival is foreign the CCE generates substantially less privatization than the CNE The optimal extent of privatization with a domestic rival exceeds that with a foreign rival in the CCE as well as in the CNE
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