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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

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.

Suggested Citation

  • Kazuhiro Ohnishi, 2008. "Strategic Commitment and International Mixed Competition with Domestic State-owned and Foreign Labor-managed Firms," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(4), pages 458-472, December.
  • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200812)64:4_458:scaimc_2.0.tx_2-w
    DOI: 10.1628/001522108X397679
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    References listed on IDEAS

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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.

    More about this item

    Keywords

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

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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