WAGE‐RISE CONTRACT AND QUANTITY COMPETITION WITH PROFIT‐MAXIMIZING AND LABOUR‐MANAGED FIRMS |
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Authors: | Kazuhiro Ohnishi |
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Institution: | Institute for Basic Economic Science, Japan |
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Abstract: | This paper examines the behaviours of a profit‐maximizing firm and a labour‐managed profit‐per‐worker‐maximizing firm in a two‐stage quantity‐setting model with a wage‐rise contract as a strategic commitment. The paper then shows that there exists a unique equilibrium that coincides with the Stackelberg solution where the profit‐maximizing firm is the leader and the labour‐managed firm is the follower. |
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Keywords: | labour‐managed firm profit‐maximizing firm quantity competition wage‐rise contract C72 D21 L20 |
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