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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Lifetime Employment and a Three-Stage Model with State-Owned and Joint-Stock Firms

Pp. 155-169 (15)

Kazuhiro Ohnishi

Abstract

This chapter investigates a mixed duopoly model where a joint-stock firm and a state-owned firm are allowed to offer lifetime employment as a strategic commitment. The chapter considers the following situation. First, the state-owned firm chooses whether to provide lifetime employment or not. Second, the joint-stock firm chooses whether to provide lifetime employment or not. Third, each firm sets its actual quantity simultaneously and independently. The chapter presents the equilibrium solution of the mixed market model. As a result of this, it is suggested that introducing lifetime employment into the model of quantity-setting mixed duopoly is beneficial for the state-owned firm.

Keywords:

Cournot competition, income per capital, joint-stock firm, lifetime employment, mixed duopoly, perfectly substitutable goods, economic welfare, state-owned firm, strategic commitment, three-stage model.

Affiliation:

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