IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v89y2018i2p437-448.html
   My bibliography  Save this article

Insufficient Entry Of Employee-Controlled Firms In A Free-Entry Oligopoly

Author

Listed:
  • Kojun HAMADA
  • Takao OHKAWA
  • Makoto OKAMURA

Abstract

This study is a theoretical examination of whether employee-controlled firms (ECFs) enter a free-entry oligopolistic market excessively or insufficiently, from the viewpoint of welfare maximization. The excess entry theorem is well known in oligopoly theory. According to this theorem, a greater number of profit-maximizing firms enter a free-entry oligopolistic market than is optimal for welfare maximization. We demonstrate the possibility that insufficient entry arises when ECFs compete in a free-entry market. In particular, we show that if both the demand and cost functions are convex, insufficient ECF entry necessarily occurs. Our results suggest that competition among firms seeking purposes other than profit might lead to insufficient entry because differences in competing firms objectives affect the intensity of market competition.

Suggested Citation

  • Kojun HAMADA & Takao OHKAWA & Makoto OKAMURA, 2018. "Insufficient Entry Of Employee-Controlled Firms In A Free-Entry Oligopoly," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(2), pages 437-448, June.
    • Handle: RePEc:bla:annpce:v:89:y:2018:i:2:p:437-448
    as

    Download full text from publisher

    File URL: http://onlinelibrary.wiley.com/doi/10.1111/apce.2018.89.issue-2/issuetoc
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Basak Debasmita & Mukherjee Arijit, 2022. "Social Efficiency of Market Entry Under Tax Policy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 22(3), pages 601-610, July.
    2. de Pinto Marco & Goerke Laszlo, 2019. "Efficiency Wages in Cournot-Oligopoly," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(4), pages 1-13, October.
    3. Goerke, Laszlo, 2020. "A political economy perspective on horizontal FDI in a dynamic Cournot-oligopoly with endogenous entry," European Journal of Political Economy, Elsevier, vol. 63(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:89:y:2018:i:2:p:437-448. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.