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

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  • Kazuhiro Ohnishi

    (Osaka University and Institute for Basic Economic Science)

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    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.

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    Bibliographic Info

    Article provided by Society for AEF in its journal Annals of Economics and Finance.

    Volume (Year): 10 (2009)
    Issue (Month): 1 (May)
    Pages: 49-64

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    Handle: RePEc:cuf:journl:y:2009:v:10:i:1:p:49-64

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    Related research

    Keywords: Capacity investment; State-owned firm; Labor-managed firm;

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    References

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    Cited by:
    1. Kazuhiro Ohnishi, 2013. "A Two-production-period Model with State-owned and Labour-managed Firms," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(1), pages 41-56, April.

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