Inventories in a Labour-Managed Economy

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

Zagreb International Review of Economics and Business, 2010, vol. 13, issue 1, 41-50

Abstract: This paper considers a two-period model in which two labour-managed firms can use inventory investment as a strategic device. In the first period, each firm simultaneously and independently chooses how much it sells in the current market and the level of inventory it holds for the second-period market. The paper shows the reaction curves in the model with inventories. The paper finds that inventories may be used by labour-managed firms to facilitate tacit collusion.

Date: 2010
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