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

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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, Faculty of Economics and Administration, University of Malaya, vol. 5(1), pages 41-56, April.

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