IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v3y1998i4p359-369.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://link.springer.de/link/service/journals/10058/papers/8003004/80030359.pdf
    Download Restriction: Access to the full text of the articles in this series is restricted
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gilbert, Richard J., 1989. "Mobility barriers and the value of incumbency," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 8, pages 475-535, Elsevier.
    2. Jeremy I. Bulow & John Geanakoplos & Paul D. Klemperer, 1983. "Multimarket Oligopoly," Cowles Foundation Discussion Papers 674, Cowles Foundation for Research in Economics, Yale University.
    3. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    4. Reinganum, Jennifer F, 1983. "Uncertain Innovation and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 73(4), pages 741-748, September.
    5. Cremer, Helmuth & Cremer, Jacques, 1992. "Duopoly with employee-controlled and profit-maximizing firms: Bertrand vs Cournot competition," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 241-258, June.
    6. Harris, Christopher J & Vickers, John S, 1985. "Patent Races and the Persistence of Monopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 33(4), pages 461-481, June.
    7. Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-526, June.
    8. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Cuccia, Tiziana & Cellini, Roberto, 2007. "Workers' enterprises in the case of arts production," MPRA Paper 5192, University Library of Munich, Germany.
    2. Tiziana Cuccia & Roberto Cellini, 2009. "Workers' Enterprises And The Taste For Production: The Arts, Sport And Other Cases," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(1), pages 123-137, February.
    3. Hamid Beladi & Arijit Mukherjee, 2022. "R&D competition and the persistence of technology leadership," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(3), pages 272-284, September.
    4. Roberto Cellini & Luca Lambertini, 2006. "Workers’ enterprises are not perverse: differential oligopoly games with sticky price," Review of Economic Design, Springer;Society for Economic Design, vol. 10(3), pages 233-248, December.
    5. Goel, Rajeev K. & Haruna, Shoji, 2007. "Cooperative and noncooperative R&D with spillovers: The case of labor-managed firms," Economic Systems, Elsevier, vol. 31(4), pages 423-440, December.
    6. Saha, Souresh, 2014. "Firm's objective function and product and process R&D," Economic Modelling, Elsevier, vol. 36(C), pages 484-494.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hamid Beladi & Arijit Mukherjee, 2022. "R&D competition and the persistence of technology leadership," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(3), pages 272-284, September.
    2. Ping Lin & Tianle Zhang & Wen Zhou, 2020. "Vertical integration and disruptive cross‐market R&D," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(1), pages 51-73, January.
    3. Aron, Debra J, 1993. "Diversification as a Strategic Preemptive Weapon," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 41-70, Spring.
    4. Czarnitzki, Dirk & Kraft, Kornelius, 2004. "An empirical test of the asymmetric models on innovative activity: who invests more into R&D, the incumbent or the challenger?," Journal of Economic Behavior & Organization, Elsevier, vol. 54(2), pages 153-173, June.
    5. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    6. Enrique Schroth & Dezsö Szalay, 2010. "Cash Breeds Success: The Role of Financing Constraints in Patent Races," Review of Finance, European Finance Association, vol. 14(1), pages 73-118.
    7. L. Lambertini, 1995. "Cournot Vs Stackelberg Equilibria With Entrepreneurial and Labour Managed Firms," Working Papers 217, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Jacob Seifert, 2015. "Welfare effects of compulsory licensing," Journal of Regulatory Economics, Springer, vol. 48(3), pages 317-350, December.
    9. Kenneth S. Corts, 2000. "Focused Firms and the Incentive to Innovate," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 339-362, June.
    10. Chakravarthi Narasimhan & Z. John Zhang, 2000. "Market Entry Strategy Under Firm Heterogeneity and Asymmetric Payoffs," Marketing Science, INFORMS, vol. 19(4), pages 313-327, November.
    11. Arlan Brucal & Michael Roberts, 2015. "Can Energy Efficiency Standards Reduce Prices and Improve Quality? Evidence from the US Clothes Washer Market," Working Papers 2015-5, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    12. Argyres, Nicholas S. & Liebeskind, Julia Porter, 2002. "Governance inseparability and the evolution of US biotechnology industry," Journal of Economic Behavior & Organization, Elsevier, vol. 47(2), pages 197-219, February.
    13. Gert Brunekreeft & David Newbery, 2006. "Should merchant transmission investment be subject to a must-offer provision?," Journal of Regulatory Economics, Springer, vol. 30(3), pages 233-260, November.
    14. Bruno Cassiman & Masako Ueda, 2006. "Optimal Project Rejection and New Firm Start-ups," Management Science, INFORMS, vol. 52(2), pages 262-275, February.
    15. Flavio DelbonoBy & Luca Lambertini, 2022. "Innovation and product market concentration: Schumpeter, arrow, and the inverted U-shape curve [Lessons from schumpeterian growth theory]," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 297-311.
    16. Bruno D. Badia, 2019. "Patent Licensing and Technological Catch-Up in a Heterogeneous Duopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(2), pages 287-300, September.
    17. Dirk Czarnitzki & Kornelius Kraft, 2010. "Which Firms Buy Licenses? Market Positions and License Expenditures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(3), pages 471-488, September.
    18. Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2006. "Efficiency Gains from Mergers," Chapters, in: Fabienne IIzkovitz & Roderick Meiklejohn (ed.), European Merger Control, chapter 3, Edward Elgar Publishing.
    19. Prajit K. Dutta & Saul Lach & Aldo Rustichini, 1995. "Better Late than Early: Vertical Differentiation in the Adoption of a New Technology," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 563-589, December.
    20. Alexeev, Michael & Kaganovich, Michael, 1998. "Returns to human capital under uncertain reform: Good guys finish last," Journal of Economic Behavior & Organization, Elsevier, vol. 37(1), pages 53-70, September.

    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

    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:spr:reecde:v:3:y:1998:i:4:p:359-369. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.