摘要: Existing literature on mixed oligopoly focuses competition among different types of firms but ignores their possible cooperation. We allow cooperation between public firm and private through subcontracting in a Hotelling duopoly model. find that when is possible, the equilibrium without not socially optimal since can lower total production costs. And if both engage subcontracting, existence guarantee first best equilibrium, whether it low cost or not. But firm, more profitable for to choose vertical foreclosure. consequent desirable anymore.
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