Privatization and mergers in mixed oligopoly models

Abstract

The aim of this paper is to complement the existing literature on horizontal
mergers, by setting a Cournot mixed oligopoly model. Specifically, the merger
paradox is qualified by proving that a merger could be profitable for the merging
firms even if it does not include most market firms. Furthermore, it is
proved that a merger can only be welfare improving if the degree of privatization
of the public firm is low enough.