Process innovation and the persistence of monopoly with labour-managed firms

Luca Lambertini ()

Review of Economic Design, 1998, vol. 3, issue 4, 359-369

Abstract: The issue of the persistence of monopoly when at least one labour-managed firm takes part in an auction for a cost-reducing innovation is tackled in this paper. It is shown that (i) when the incumbent is a profit-maximizing firm while the entrant is a labour-managed firm, monopoly persists; (ii) when both firms are labour-managed, monopoly persists only if the technology initially employed by the incumbent is highly inefficient as compared to the new one; and, finally, (iii) when the incumbent is labour-managed while the outsider is a profit seeking agent, then entry always occurs and monopoly changes hands.

JEL-codes: D92 L13 L20 O31 (search for similar items in EconPapers)
Date: 1998-09-16
Note: Received: 3 July 1997 / Accepted: 16 February 1998
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Citations: View citations in EconPapers (6)

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Working Paper: Process Innovation and the Persistence of Monopoly with Labour-Managed Firms (1997)
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