Capacity Investment and Mixed Duopoly with State-Owned and Labor-Managed Firms

Kazuhiro Ohnishi
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Kazuhiro Ohnishi: Osaka University and Institute for Basic Economic Science

Annals of Economics and Finance, 2009, vol. 10, issue 1, 49-64

Abstract: We examine the behaviors of one state-owned welfare-maximizing firm and one labor-managed income-per-worker-maximizing firm in a two-stage mixed market model with capacity investment as a strategic instrument. In the first stage, each firm independently decides whether or not to install capacity. This capacity may subsequently be increased, but cannot be decreased. Hence, the firm¡¯s capital cost changes from a variable cost to a fixed cost. In the second stage, each firm independently chooses its actual output. We show the equilibrium of the mixed model.

Keywords: Capacity investment; State-owned firm; Labor-managed firm (search for similar items in EconPapers)
JEL-codes: C72 D21 H42 L30 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (8)

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