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Strategic Entry Interactions Involving Profit-Maximising and Labour-Managed Firms

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  • Stewart, Geoff

Abstract

What determines the choice between capitalist and cooperative modes of production? Existing economic explanations focus on productive efficiency and the requirement in a cooperative that an entrepreneur share any surplus with the work force. The author shows that the entry process can also play a role. An incumbent able to engage in strategic behavior is more likely to accommodate an Illyrian labor-managed firm than a profit-maximizer into the industry. The organizational form of the incumbent is also considered. An excess capacity strategy to deter potential entry is more likely, and may take a more extreme form, when the incumbent is labor-managed. Copyright 1991 by Royal Economic Society.

Suggested Citation

  • Stewart, Geoff, 1991. "Strategic Entry Interactions Involving Profit-Maximising and Labour-Managed Firms," Oxford Economic Papers, Oxford University Press, vol. 43(4), pages 570-583, October.
  • Handle: RePEc:oup:oxecpp:v:43:y:1991:i:4:p:570-83
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    Citations

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    Cited by:

    1. Yoshihiro Tomaru & Yasuhiko Nakamura & Masayuki Saito, 2009. "Capacity Choice in a Mixed Duopoly with Managerial Delegation," Economics Bulletin, AccessEcon, vol. 29(3), pages 1904-1924.
    2. repec:ebl:ecbull:v:12:y:2004:i:2:p:1-7 is not listed on IDEAS
    3. Luciano Fanti & Nicola Meccheri, 2017. "Unionization Regimes, Capacity Choice by Firms and Welfare Outcomes," Manchester School, University of Manchester, vol. 85(6), pages 661-681, December.
    4. Nakamura, Yasuhiko, 2014. "Capacity choice in a duopoly with a consumer-friendly firm and an absolute profit-maximizing firm," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 105-117.
    5. Koichi Futagami & Makoto Okamura & Tetsuya Shinkai & Nobuhiro Mori, 2005. "Organizational Entry Deterrence Barrier:The Japanese Firm vs.the American Firm," Discussion Paper Series 23, School of Economics, Kwansei Gakuin University, revised Jan 2005.
    6. 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.
    7. Podivinsky, Jan & Stewart, Geoff, 2003. "Why are labour-managed firms so rare? An analysis of entry using UK panel data," Discussion Paper Series In Economics And Econometrics 0402, Economics Division, School of Social Sciences, University of Southampton.
    8. Kangsik Choi & DongJoon Lee, 2020. "Do firms choose overcapacity or undercapacity in a vertical structure?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(5), pages 839-847, July.
    9. Kazuhiro Ohnishi, 2008. "Strategic Investment In A New Mixed Market With Labor‐Managed And Profit‐Maximizing Firms," Metroeconomica, Wiley Blackwell, vol. 59(4), pages 594-607, November.
    10. Luciano Fanti & Nicola Meccheri, 2014. "Capacity choice and welfare under alternative unionisation structures," Discussion Papers 2014/176, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    11. Ohnishi, Kazuhiro, 2018. "Stackelberg Mixed Triopoly Games with State-Owned, Labour-Managed and Capitalist Firms," MPRA Paper 88222, University Library of Munich, Germany.
    12. 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, vol. 5(1), pages 41-56, April.
    13. Kazuhiro Ohnishi, 2019. "Capacity choice in an international mixed triopoly," Working Papers e140, Tokyo Center for Economic Research.
    14. Yoshinari Miyamoto, 2010. "Strategic Investment In A Labour‐Managed Duopoly," Bulletin of Economic Research, Wiley Blackwell, vol. 62(4), pages 317-341, October.
    15. Ohnishi, Kazuhiro, 2019. "Capacity choice in an international mixed triopoly," MPRA Paper 94051, University Library of Munich, Germany.
    16. Podivinsky, Jan M. & Stewart, Geoff, 2007. "Why is labour-managed firm entry so rare?: An analysis of UK manufacturing data," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 177-192, May.

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