Necessarily welfare-improving privatization

  title={Necessarily welfare-improving privatization},
  author={Kenji Fujiwara},
This paper examines the welfare effect of privatization in a mixed oligopoly model where multiple oligopolistic industries compete for a common factor. We find that privatization necessarily improves welfare in a benchmark case with symmetric costs across all oligopolistic industries. Moreover, we show that a production subsidy necessarily reduces welfare regardless of the level of privatization.