Skip to main content

Research Repository

Advanced Search

An efficient privatization mechanism.

Anbarcia, N. Karaaslanb; M, E.


N. Karaaslanb Anbarcia

E. M



We consider the privatization of State-Owned Enterprises (SOEs) of which markets can be opened to competition once privatization takes place and competitors can compete successfully against them in a few years. The currently used “Revenue Maximization (RM)” scheme maximizes the government revenue from privatization but does not provide incentives for the privatized SOE to charge a price lower than the monopoly price until competition arises. We propose the “Welfare Maximization (WM)” scheme, which induces the privatized SOE to charge a competitive price without resorting to regulation. Also, WM provides greater incentives for post-privatization cost reduction.


Anbarcia, N. K., & M, E. (1998). An efficient privatization mechanism. The journal of policy reform, 2(1), 73-87.

Journal Article Type Article
Publication Date 1998-02
Deposit Date Aug 17, 2018
Journal The Journal of Policy Reform
Print ISSN 1384-1289
Electronic ISSN 1477-2736
Publisher Routledge
Peer Reviewed Peer Reviewed
Volume 2
Issue 1
Pages 73-87
Public URL