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Wage-Rise Contract and Labour-Managed Cournot Oligopoly with Complementary Goods

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  • Ohnishi, Kazuhiro

Abstract

This paper considers a quantity-setting oligopoly model with complementary goods where labour-managed firms are allowed to offer wage-rise contracts as a strategic commitment. The following two stages are considered. In the first stage, each firm independently decides whether or not to adopt a wage-rise contract as a strategic commitment device. In the second stage, each firm independently chooses and sells its actual output. The paper analyses the equilibrium of the labour-managed oligopoly model.

Suggested Citation

  • Ohnishi, Kazuhiro, 2018. "Wage-Rise Contract and Labour-Managed Cournot Oligopoly with Complementary Goods," MPRA Paper 88235, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:88235
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    References listed on IDEAS

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    1. repec:bla:econom:v:52:y:1985:i:206:p:153-65 is not listed on IDEAS
    2. Kazuhiro Ohnishi, 2011. "Two-Stage Quantity-Setting Games and Tacit Collusion," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 64-77, Spring.
    3. Drago, Robert & Turnbull, Geoffrey K, 1992. "Wage Incentives in Labour-Managed and Profit Maximising Firms," Australian Economic Papers, Wiley Blackwell, vol. 31(59), pages 311-324, December.
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    5. Hill, Martyn & Waterson, Michael, 1983. "Labor-managed Cournot oligopoly and industry output," Journal of Comparative Economics, Elsevier, vol. 7(1), pages 43-51, March.
    6. Junsen Zhang, 1993. "Holding Excess Capacity to Deter Entry in a Labour-Managed Industry," Canadian Journal of Economics, Canadian Economics Association, vol. 26(1), pages 222-234, February.
    7. Kazuhiro Ohnishi, 2007. "Wage-Rise Contract and Cournot Competition with Labor-Managed Firms," Rivista di Politica Economica, SIPI Spa, vol. 97(3), pages 17-32, May-June.
    8. Bonin, John P & Jones, Derek C & Putterman, Louis, 1993. "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1290-1320, September.
    9. Kazuhiro Ohnishi, 2010. "Most-Favoured-Customer Pricing and Labour-Managed Oligopoly," Journal of Industry, Competition and Trade, Springer, vol. 10(1), pages 33-40, March.
    10. Kimya M. Kamshad, 1997. "A model of the free-entry producer cooperative," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 68(2), pages 225-245, June.
    11. 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.
    12. Ireland, Norman J., 2003. "Random pricing by labor-managed firms in markets with imperfect consumer information," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 573-583, September.
    13. Futagami, Koichi & Okamura, Makoto, 1996. "Strategic Investment: The Labor-Managed Firm and the Profit-Maximizing Firm," Journal of Comparative Economics, Elsevier, vol. 23(1), pages 73-91, August.
    14. Thomas E. Cooper, 1986. "Most-Favored-Customer Pricing and Tacit Collusion," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 377-388, Autumn.
    15. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    16. Luca Lambertini & Gianpaolo Rossini, 1998. "Capital Commitment and Cournot Competition with Labour‐managed and Profit‐maximising Firms," Australian Economic Papers, Wiley Blackwell, vol. 37(1), pages 14-21, March.
    17. Kazuhiro Ohnishi, 2009. "Strategic Commitment and Three-Stage Games with Labour-Managed and Profit-Maximizing Firms," Finnish Economic Papers, Finnish Economic Association, vol. 22(2), pages 63-74, Autumn.
    18. J Wills & A Lincoln, 1999. "Filling the Vacuum in New Management Practice? Lessons from US Employee-Owned Firms," Environment and Planning A, , vol. 31(8), pages 1497-1512, August.
    19. Kazuhiro Ohnishi, 2003. "A Model of a Price‐setting Duopoly with a Wage‐rise Contract," Australian Economic Papers, Wiley Blackwell, vol. 42(2), pages 149-157, June.
    20. Luca Lambertini, 2001. "research notes and comments: Spatial competition with profit-maximising and labour-managed firms," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(4), pages 499-507.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Cournot competition; Labour-managed oligopoly; Wage-rise contract; Complementary goods;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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