Public sector competition with private sector boosts community welfare by 80%.
The article explores how the public sector can best respond to competition from private companies in providing services like bus transit. By analyzing the optimal response to this competition, the researchers found that it can greatly benefit the community but may also lead to increased deficits. They also discovered that less ideal responses can still generate a significant portion of the benefits. Additionally, if the public sector can control transport externalities, competition can further improve community welfare.