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.
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Received: 3 July 1997 / Accepted: 16 February 1998
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Lambertini, L. Process innovation and the persistence of monopoly with labour-managed firms. Rev Econ Design 3, 359–369 (1998). https://doi.org/10.1007/s100580050021
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DOI: https://doi.org/10.1007/s100580050021