Abstract
The paper analyzes a mixed oligopoly with horizontal product differentiation. Firms choose their location and price in a model à la Hotelling with quadratic transport costs, and the solution-concept is a subgame perfect Nash equilibrium. This enables one to determine how the presence of one or several public firms competing with private ones affects social welfare and how the results depend on the total number of firms ( n) and their relative positions. It is shown that is only for n=2 or n≧6 that a mixed oligopoly with one public firm is socially preferable to the private oligopoly.
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