ORGANIZATIONAL STRUCTURE AND THE CHOICE OF PRICE VERSUS QUANTITY IN A MIXED DUOPOLY

We consider the choice of price/quantity of 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.