Irrelevance of Conjectural Variation in a Mixed Duopoly: The Case of Relative Performance and Consistent Conjectures

Yasuhiko Nakamura

College of Economics, Nihon University, Chiyoda, Japan.

DOI: 10.4236/tel.2013.35A2002                

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.

Keywords

Mixed duopoly; Relative Profit Maximization; Conjectural Variation; Consistent Conjecture JEL Classification: L20, L32, D43

Conflicts of Interest

The authors declare no conflicts of interest.

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