WSEAS Transactions on Systems
Print ISSN: 1109-2777, E-ISSN: 2224-2678
Volume 17, 2018
Privatization and Government Preference in an International Cournot Triopoly
Authors: ,
Abstract: This paper presents an analysis of the relationship between the privatization of a state-controlled firm and government preferences for tax revenue, by using a mixed Cournot model with domestic and foreign firms. We assume that the government fixes a tax rate on the domestic production and a tariff for imported goods. The state-controlled firm aims to maximize the sum of consumer and producer surplus; the government’s objective function is a weighted sum between social welfare and tax revenue.