Partial privatization in a quantity-pricesetting mixed duopoly

This paper studies the optimal level of privatization in a mixed duopoly with one state-owned semi-public firm and one private firm producing imperfectly substitutable goods, and the corresponding effects. We consider two potential combinations: (i) the state-owned public firm sets the price and the private firm sets the output production; and (ii) the state-owned public firm sets the output production and the private firm sets the price.