I present a generalized form of firms’ objective function. Besides classical
own profit maximization, I add two distinct concerns: consumer surplus and
competitors’ profits. This generalization can account for public and partially privatized
firms, socially concerned firms as well as partially cooperating firms. I study a simple
duopoly game to compare and discuss the effects of both concerns on equilibrium
outcomes.
Keywords: Consumer surplus, Cournot game, mixed oligopoly, private firms,
public firms, socially concerned firms, partial cooperation, partial privatization,
strategic firm objectives, welfare.
