The role of information in profit-maximizing and labor-managed duopoly models

This paper analyzes the welfare implications of acquiring information for profit-maximizing and labor-managed duopolies. We invent a unified method of exploring the role of information in a two-person game under uncertainty on the basis of comparative static analysis, and then apply the method to both the PMF and the LMF. It is shown that whereas the LMF's behavior is analogous to that of the PMF twin in some circumstances, the former may be entirely different from the latter in others. Because a special status is accorded to labor as a variable factor of production, the informational analysis of the LM economy requires special care for both computations and interpretations.