Firms` Strategic Decisions Theoretical and Empirical Findings

Volume: 1

Indexed in: EBSCO.

This eBook presents recent case studies on firms and their strategy employed in specific scenarios and industries. Readers will find, in this volume, an analysis of oligopolistic industries done by ...
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Wage-Rise Contract and a Three-Stage Model with State-Owned and Labour-Managed Firms

Pp. 139-154 (16)

Kazuhiro Ohnishi

Abstract

This chapter examines a three-stage model where a state-owned firm and a labour-managed firm can sequentially offer a wage-rise contract as a strategic device before competing in quantities. The following three stages are considered. At stage one, the state-owned firm chooses whether or not to offer a wage-rise contract. At stage two, the labour-managed firm chooses whether or not to offer a wage-rise contract. At stage three, the firms set their outputs simultaneously and independently. This chapter studies the equilibrium outcome of the three-stage mixed market model.

Keywords:

Cournot competition, labour-managed firm, mixed duopoly, perfectly substitutable goods, profit per worker, state-owned firm, economic welfare, subgame perfection, three-stage model, wage-rise contract.

Affiliation:

Institute for Basic Economic Science, 2-15-12 Hanjo, Minoo, Osaka 562-0044, Japan.