Wage-rise contract and endogenous timing in international mixed duopoly |
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Authors: | Kazuhiro Ohnishi |
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Institution: | 1. Northwestern University, United States;2. University of Chicago, United States;3. Higher School of Economics, Moscow, Russia;1. University of Salerno and CSEF, Italy;2. University Ca'' Foscari of Venice, CSEF and CEPR, Italy |
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Abstract: | This paper examines an endogenous-timing mixed model, where a public firm competes against a foreign private firm. Each firm first chooses the timing for adopting a wage-rise contract as a strategic instrument. The following situation is considered. In the first stage, each firm simultaneously and independently chooses the stage in which it adopts a wage-rise contract, namely either stage 2 or stage 3. In the second stage, the firm choosing stage 2 can adopt the wage-rise contract in this stage. In the third stage, the firm choosing stage 3 can adopt the wage-rise contract in this stage. At the end of the game, each firm simultaneously and independently chooses its output. The paper discusses the equilibrium of the endogenous-timing mixed model. |
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