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UPWARD-SLOPING REACTION FUNCTIONS UNDER QUANTITY COMPETITION IN MIXED OLIGOPOLIES*
*
This paper is a revised version of our discussion paper 118, Department of Economics, University of Bologna (1991). We thank Kai-Uwe Kühn and two anonymous referees for helpful remarks on an earlier draft.
ABSTRACT
It is shown that in a mixed duopoly under quantity competition, the public firm's reaction function may be upward-sloping. This is the case with a concave demand function when the public firm attaches to private profits a smaller weight than to its own profits.
