Public investment in mixed duopoly boosts quality and lowers prices significantly.
The article explores how public investment affects private investment and pricing in a mixed duopoly. It looks at different products and demand without assuming the public firm is more efficient. The study finds that public investment can crowd out private investment under certain conditions. It also shows that in a mixed duopoly, individual investments and prices can be higher or lower compared to a standard duopoly. Additionally, with linear demand, the public firm can improve the private firm's price-quality ratio.