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Process innovation and the persistence of monopoly with labour-managed firms

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  • Luca Lambertini

    (Dipartimento di Scienze Economiche, UniversitÁ degli Studi di Bologna, Strada Maggiore 45, I-40125 Bologna, Italy)

Abstract

The issue of the persistence of monopoly when at least one labour-managed firm takes part in an auction for a cost-reducing innovation is tackled in this paper. It is shown that (i) when the incumbent is a profit-maximizing firm while the entrant is a labour-managed firm, monopoly persists; (ii) when both firms are labour-managed, monopoly persists only if the technology initially employed by the incumbent is highly inefficient as compared to the new one; and, finally, (iii) when the incumbent is labour-managed while the outsider is a profit seeking agent, then entry always occurs and monopoly changes hands.

Suggested Citation

  • Luca Lambertini, 1998. "Process innovation and the persistence of monopoly with labour-managed firms," Review of Economic Design, Springer;Society for Economic Design, vol. 3(4), pages 359-369.
    • Handle: RePEc:spr:reecde:v:3:y:1998:i:4:p:359-369
    Note: Received: 3 July 1997 / Accepted: 16 February 1998
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    References listed on IDEAS

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    Cited by:

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    2. Cuccia, Tiziana & Cellini, Roberto, 2007. "Workers' enterprises in the case of arts production," MPRA Paper 5192, University Library of Munich, Germany.
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    6. Saha, Souresh, 2014. "Firm's objective function and product and process R&D," Economic Modelling, Elsevier, vol. 36(C), pages 484-494.

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    More about this item

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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