Mixed oligopoly, productive efficiency, and spillover

Abstract

The purpose of this paper is to examine the public sector's cost-reducing investment when there exists the effect of R&D spillover. We show that the investment in the mixed oligopoly is not higher than that in the public monopoly. When the cost-reducing effect of investment for each firm is the same, the investment in the mixed oligopoly is equal to that in the public monopoly. In such a case, the emergence of private firms has a positive impact on social welfare. Our model is an extended version of Nishimori and Ogawa (2002), which study the R&D investment by the public sector.state-owned public firm