Optimal manipulation rules in a mixed oligopoly

We study the optimal manipulation rules of a public firm\u2019s objective function in a mixed oligopoly with imperfect product substitutability. We start with a baseline duopoly model and compare the solutions under quantity and price com- petition, and the way they are affected by product substitutability. This allows us to show that partial privatization, strategic delegation and other specific government\u2019s commitments on the objective function of the public management can be looked at as special cases of these optimal rules, and to evaluate the viability of these policies under the two modes of competition. In this framework, we also discuss the equiv- alence between manipulation of the objective function and Stackelberg leadership. Since optimal manipulation rules change as new dimensions are added, we also derive the optimal rules under oligopoly, quadratic costs, and competition of international firms. This fairly general unified framework allows to discuss the impact of these fac- tors on the government\u2019s implementation policies of the optimal manipulation rules