@article {Wen:September 2001:0013-0249:283,
	author = "Wen M.",
	author = "Sasaki D.",
	title = "Would Excess Capacity in Public Firms Be Socially Optimal?",
	journal = "The Economic Record",
	volume = "77",
	year = "September 2001",
	abstract = "<P>We analyse oligopolistic interactions between a welfare-maximizing public firm and a profit-maximizing private firm in a repeated game. We find that the public firm can hold excess capacity as a strategic punishment device to sustain a subgame perfect equilibrium which is welfare-superior to the static Nash equilibrium. Basically, potential punishment from the public firm in the dynamic game can make the self-interested private firm behave in the public interest. Furthermore, if capacity is endogenous, public excess capacity can occur in a welfare efficient equilibrium when the cost of public capacity investment is higher than that of private investment.</P>",
	pages = "283-290(8)",
	url = "http://www.ingentaconnect.com/content/bpl/ecor/2001/00000077/00000003/art00023"
}