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Information acquisition under uncertainty: The case of labor-managed and profit-maximizing firms coexist

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  • Luo, Jianli

Abstract

This paper analyzes the output decision and welfare implications of acquiring information under uncertainty for the duopoly market coexisted by a labor-managed firm (LMF) and a profit-maximizing firm (PMF). By establishing objective functions of LMF and PMF, it constructs the theoretical framework to discuss the role of information in the duopoly firstly. Then, based on the comparative static analysis, it discusses the effects of the market demand information and cost information on expected output and welfare. Finally it compares the role of information in LMF with the case of PMF, and the role of information in the LMF–PMF duopoly with those of LMF–LMF duopoly and PMF–PMF duopoly. It is shown that whereas the LMF's behavior is analogous to that of the PMF twin in some circumstances, the former may be entirely different from the latter in others. The LMF will be more sensitive to the information.

Suggested Citation

  • Luo, Jianli, 2012. "Information acquisition under uncertainty: The case of labor-managed and profit-maximizing firms coexist," Economic Modelling, Elsevier, vol. 29(6), pages 2527-2532.
    • Handle: RePEc:eee:ecmode:v:29:y:2012:i:6:p:2527-2532
    DOI: 10.1016/j.econmod.2012.07.013
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    References listed on IDEAS

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    Cited by:

    1. Luo, Jian-Li & Hu, Zhen-Hua, 2015. "Risk paradigm and risk evaluation of farmers cooperatives' technology innovation," Economic Modelling, Elsevier, vol. 44(C), pages 80-85.
    2. Yin, Xundong & Wang, Sophie Xuefei & Lu, Yuanzhu & Yan, Jianye, 2023. "Endogenous information acquisition and disclosure of private information in a duopoly," Economic Modelling, Elsevier, vol. 126(C).
    3. Luo, Jianli, 2013. "Absorptive capacity and R&D strategy in mixed duopoly with labor-managed and profit-maximizing firms," Economic Modelling, Elsevier, vol. 31(C), pages 433-439.

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