Capacity choice in an international mixed triopoly

Kazuhiro Ohnishi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper considers a mixed triopoly model where a state-owned firm, a domestic labor-managed firm and a foreign capitalist firm are allowed to pre-install capacity as a strategic commitment device. First, each firm simultaneously and independently chooses its capacity level. None of the firms can reduce or dispose of capacity. Second, each firm simultaneously and independently chooses its output level. The paper shows that there is an equilibrium solution where only the domestic labor-managed firm pre-installs excess capacity as a strategic commitment device.

Keywords: Excess capacity; State-owned firm; Domestic labor-managed firm; Foreign capitalist firm (search for similar items in EconPapers)
JEL-codes: C72 D21 F23 L30 (search for similar items in EconPapers)
Date: 2019-05-21
New Economics Papers: this item is included in nep-gth and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:94051

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