Private Firms' Location Choice Under Multi‐Market Mixed Duopoly With Cost Differentials

ABSTRACT

The study examines how private firms choose between high‐ and low‐ marginal‐cost regions in mixed oligopoly markets where public or semipublic firms operate in both regions. Findings show that large cost differences lead private firms to choose low‐cost regions, while in the case of small differences, their choice depend on the degree of privatization. A welfare analysis shows that private firms' choices may not align with socially optimal locations when cost differences and privatization levels are moderate.