TITLE:
Irrelevance of Conjectural Variation in a Mixed Duopoly: The Case of Relative Performance and Consistent Conjectures
AUTHORS:
Yasuhiko Nakamura
KEYWORDS:
Mixed duopoly; Relative Profit Maximization; Conjectural Variation; Consistent Conjecture JEL Classification: L20, L32, D43
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.5B,
August
30,
2013
ABSTRACT: This study explores the equilibrium
outcomes in the contexts of quantity-setting and price-setting mixed
duopolies with consistent conjectures of both the social welfare maximizing
public firm and the relative profit maximizing private firm. Similar to the private
duopoly composed of only relative profit maximizing firms,
we show that in the mixed duopoly, the equilibrium outcomes in the
quantity-setting competition with the consistent conjectures of both firms are
equivalent to those in the price-setting competition with
the consistent conjectures of both firms.