Holding Excess Capacity to Deter Entry in a Labour-Managed Industry
This paper considers the Dixit model of entry deterrence and adapts it to the case in which firms are maximizing surplus per worker rather than profits. The properties of this model are analogous but not identical to those of the Dixit model. Of particular interest is the possibility that the best response functi ons may be positively sloped, even though demand satisfies that a firm's marginal revenue is decreasing in rival firms' output. This possibil ity implies the existence of perfect equilibria in which the incumbent holds excess capacity, which is not possible in the Dixit model give n the above condition.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 26 (1993)
Issue (Month): 1 (February)
|Contact details of provider:|| Postal: |
Web page: http://economics.ca/cje/Email:
More information through EDIRC
|Order Information:|| Web: http://economics.ca/en/membership.php Email: |
When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:26:y:1993:i:1:p:222-34. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler)
If references are entirely missing, you can add them using this form.