Incentives for Anticompetitive Behavior by Public Enterprises
@article{Sappington2003IncentivesFA, title={Incentives for Anticompetitive Behavior by Public Enterprises}, author={David E. M. Sappington and J. Gregory Sidak}, journal={Review of Industrial Organization}, year={2003}, volume={22}, pages={183-206} }
We examine the competitive behavior of a public enterprise thatdoes not seek solely to maximize its profit. We find that despite a reduced focus on profit, a publicenterprise may have stronger incentives to pursue anticompetitive activities than does a private,profit-maximizing firm. These activities include setting prices below marginal cost, raising theoperating costs of existing rivals, erecting entry barriers to preclude the operation of new competitors,and circumventing regulations…
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