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Strategic Commitment and International Mixed Competition with Domestic State-owned and Foreign Labor-managed Firms

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  • Kazuhiro Ohnishi
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    Abstract

    This paper examines an international mixed model in which a domestic state-owned welfare-maximizing public firm competes against a foreign labor-managed income-per-worker-maximizing private firm. In the first stage, each firm independently decides whether or not to make a commitment to capacity. This capacity may subsequently be increased, but cannot be reduced. Hence, the firm's capacity cost is sunk and changes from a variable cost to a fixed cost. In the second stage, each firm independently chooses its actual output. The paper shows the equilibrium of the international mixed model.

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    Bibliographic Info

    Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

    Volume (Year): 64 (2008)
    Issue (Month): 4 (December)
    Pages: 458-472

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    Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200812)64:4_458:scaimc_2.0.tx_2-w

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    Web page: http://www.mohr.de/fa

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    Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
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    Related research

    Keywords: international mixed duopoly; domestic state-owned firm; foreign labor-managed firm; strategic commitment;

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    Cited by:
    1. Kazuhiro Ohnishi, 2009. "Capacity Investment and Mixed Duopoly with State-Owned and Labor-Managed Firms," Annals of Economics and Finance, Society for AEF, vol. 10(1), pages 49-64, May.

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