Quantity Precommitment and Mixed Duopoly with Price Competition
- By Kazuhiro Ohnishi1
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View Affiliations Hide Affiliations1 Institute for Basic Economic Science, 2 15-12 Hanjo, Minoo, Osaka 562-0044, Japan.
- Source: Firms' Strategic Decisions: Theoretical and Empirical Findings: Volume 1 , pp 182-194
- Publication Date: April 2015
- Language: English
Quantity Precommitment and Mixed Duopoly with Price Competition, Page 1 of 1
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This chapter investigates a mixed duopoly model where a capitalist private firm and a state-owned public firm coexist. The following two-stage game is considered. At stage one, the firms choose whether or not to provide lifetime employment as a strategic device simultaneously and noncooperatively. This irreversible behavior changes the price-competing market environment of stage two. At stage two, the firms set prices simultaneously and noncooperatively. The chapter discusses the equilibrium solution of the mixed market model. As a result of this analysis, we discover that introducing lifetime employment into the model of price-setting mixed duopoly may be beneficial for the state-owned firm.
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