Public-Private Competition in Regulated Markets

We analyse the effect of competition on quality provision in mixed markets, such as healthcare and education, where public private providers coexist. draw two key assumptions about provider namely that it faces a regulated price is (partly) motivated. also explore effects changes state subsidy co-payment fees. Our main contribution that, under certain circumstances, more leads to lower average equilibrium. Similarly, higher fees or larger subsidies are priori ambiguous. These conclusions hold regardless whether seek profit maximisation has altruistic preferences. Furthermore, we characterise incentives for unilaterally relocate towards provider.