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The Theory of the Labour-Managed Firm Revisited: The Voluntary Interactive Approach

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  • Kahana, Nava
  • Nitzan, Shmuel

Abstract

Membership in the authors' labor-managed firm is determined in the long run by expected income maximization. In the short run, upon the realization of output price, each member may leave the labor-managed firm. However, a decision to leave when the entire membership quits is associated with fixed cost. This arrangement ensures ex post egalitarianism and sense of job security. The authors' short-run result is that employment does not exhibit a perverse response to price variations. The long-run result is that their labor-managed firm is more populous than the Illyrian firm and may even be more than its capitalistic twin. Copyright 1993 by Royal Economic Society.

Suggested Citation

  • Kahana, Nava & Nitzan, Shmuel, 1993. "The Theory of the Labour-Managed Firm Revisited: The Voluntary Interactive Approach," Economic Journal, Royal Economic Society, vol. 103(419), pages 937-945, July.
    • Handle: RePEc:ecj:econjl:v:103:y:1993:i:419:p:937-45
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    Cited by:

    1. Donald A.R. George, 2007. "Workers' Savings And The Right To Manage," Journal of Economic Surveys, Wiley Blackwell, vol. 21(3), pages 534-552, July.
    2. Harold Paredes-Frigolett & Pablo Nachar-Calderón & Carmen Marcuello, 2017. "Modeling the governance of cooperative firms," Computational and Mathematical Organization Theory, Springer, vol. 23(1), pages 122-166, March.
    3. Nyssens, Marthe & Van der Linden, Bruno, 2000. "Embeddedness, cooperation and popular-economy firms in the informal sector," Journal of Development Economics, Elsevier, vol. 61(1), pages 175-204, February.

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