The welfare impact of a managerial oligopoly with an altruistic firm

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Abstract

I analyse the welfare impact of a mixed market with a private or public firm that is characterised by wider objectives or altruism, in the presence of an agency problem. Contrary to some earlier findings, the total surplus turns out to be increasing in the degree of altruism. This impact is stronger than without an agency problem, despite more stringent conditions for the market to remain mixed. The altruistic firm is more cost efficient, and viable if the market can remain mixed. A competition policy that encourages entry may increase welfare, but its scope is reduced by higher altruism.
Original languageUndefined/Unknown
Pages (from-to)97–115
JournalJournal of Economics
Volume109
Issue number2
DOIs
Publication statusPublished - 2013
MoE publication typeA1 Journal article-refereed

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