Incentives for Anticompetitive Behavior by Public Enterprises

  title={Incentives for Anticompetitive Behavior by Public Enterprises},
  author={D. Sappington and J. Sidak},
  journal={Review of Industrial Organization},
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… Expand