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Socially concerned duopolies with lifetime employment as a strategic commitment

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  • Ohnishi, Kazuhiro

Abstract

This paper considers a two-stage game model with a nonlinear concave demand function where two socially concerned firms compete with each other. In the first stage, each firm decides simultaneously and independently whether to offer lifetime employment as a strategic commitment device. In the second stage, after observing the rival’s choice in the first stage, each firm chooses simultaneously and independently an actual output level. Each socially concerned firm maximizes its own profit plus a fraction of consumer surplus. The paper discusses the equilibrium outcomes of the model.

Suggested Citation

  • Ohnishi, Kazuhiro, 2022. "Socially concerned duopolies with lifetime employment as a strategic commitment," MPRA Paper 111625, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111625
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    File URL: https://mpra.ub.uni-muenchen.de/116260/1/MPRA_paper_116260.pdf
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    References listed on IDEAS

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    1. Lisa Planer-Friedrich & Marco Sahm, 2018. "Why Firms Should Care for All Consumers," Economics Bulletin, AccessEcon, vol. 38(3), pages 1603-1612.
    2. Kopel, Michael & Lamantia, Fabio & Szidarovszky, Ferenc, 2014. "Evolutionary competition in a mixed market with socially concerned firms," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 394-409.
    3. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    4. Kazuhiro Ohnishi, 2006. "A Mixed Duopoly with a Lifetime Employment Contract as a Strategic Commitment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 108-123, March.
    5. Sabri Boubaker & Duc Khuong Nguyen (ed.), 2012. "Board Directors and Corporate Social Responsibility," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-38930-4.
    6. White, Mark D., 2001. "Managerial incentives and the decision to hire managers in markets with public and private firms," European Journal of Political Economy, Elsevier, vol. 17(4), pages 877-896, November.
    7. Flores, Daniel & García, Arturo, 2016. "On the output and welfare effects of a non-profit firm in a mixed duopoly: A generalization," Economic Systems, Elsevier, vol. 40(4), pages 631-637.
    8. Delbono, Flavio & Scarpa, Carlo, 1995. "Upward-Sloping Reaction Functions under Quantity Competition in Mixed Oligopolies," Bulletin of Economic Research, Wiley Blackwell, vol. 47(4), pages 341-346, October.
    9. Luciano Fanti & Domenico Buccella, 2018. "Profitability of corporate social responsibility in network industries," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 65(3), pages 271-289, September.
    10. Thomas E. Cooper, 1986. "Most-Favored-Customer Pricing and Tacit Collusion," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 377-388, Autumn.
    11. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    12. Ohnishi, Kazuhiro, 2002. "On the Effectiveness of the Lifetime-Employment-Contract Policy," Manchester School, University of Manchester, vol. 70(6), pages 812-821, December.
    13. Arturo García & Mariel Leal & Sang-Ho Lee, 2019. "Endogenous Timing with a Socially Responsible Firm," Korean Economic Review, Korean Economic Association, vol. 35, pages 345-370.
    14. Kazuhiro Ohnishi, 2001. "Lifetime Employment Contract and Strategic Entry Deterrence: Cournot and Bertrand," Australian Economic Papers, Wiley Blackwell, vol. 40(1), pages 30-43, March.
    15. Michael Kopel, 2015. "Price and Quantity Contracts in a Mixed Duopoly with a Socially Concerned Firm," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(8), pages 559-566, December.
    16. Gregory E. Goering, 2007. "The strategic use of managerial incentives in a non-profit firm mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 83-91.
    17. Kazuhiro Ohnishi, 2002. "On the Effectiveness of the Lifetime–Employment–Contract Policy," Manchester School, University of Manchester, vol. 70(6), pages 812-821, December.
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    Cited by:

    1. Ohnishi, Kazuhiro, 2022. "Wage-rise contract and mixed Cournot duopoly competition with profit-maximizing and socially concerned firms," MPRA Paper 112536, University Library of Munich, Germany.

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    More about this item

    Keywords

    Concave demand function; Cournot duopoly model; Lifetime employment; Socially concerned firms;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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