Process innovation and the persistence of monopoly with labour-managed firms |
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Authors: | Luca Lambertini |
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Institution: | (1) Dipartimento di Scienze Economiche, Università degli Studi di Bologna, Strada Maggiore 45, I-40125 Bologna, Italy (Fax: 0039-51-6402664; e-mail: lamberti@spbo.unibo.it), IT |
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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.
Received: 3 July 1997 / Accepted: 16 February 1998 |
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Keywords: | JEL classification: D92 L13 L20 O31 :Auction process innovation persistence of monopoly efficiency effect labour-managed firms |
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