Co-Production and Reversed Cream-Skimming in Quasi-markets

Name: Co-Production and Reversed Cream-Skimming in Quasi-markets
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2012 - 2

Title

Co-Production and Reversed Cream-Skimming in Quasi-markets

Authors

Flavio Delbono, Diego Lanzi

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

02-2012

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

In this paper, we provide a very simple model to shed light on the issue of managed competition in mixed quasi-markets (i.e. regulated markets in which social and for-profit firms coexist). In doing this, we consider the literature on mixed oligopolies as a reasonable reference point and try to enrich it with the idea of quasi-market. Firstly, our results show that social firms serve the relatively richer portion of the population. Only relatively poor consumers buy units of service from the profit-oriented firm. Secondly, the socially-preferable form of managed competition is to introduce co-production practices and, hence, to raise profit-oriented firm’s production costs. The diffusion of co-production paradigms ensures maximal service quality and eliminates mark-up from the market.

Keywords: Quasi-Markets, Competition, Regulation, Mixed Oligopoly, Social Firm.
JEL Classification: I18, L13, L84.