Article

 

Tacit collusion in a labor-managed oligopoly market (p.97-107)

by

Kazuhiro Ohnishi, Osaka University & Institute for Basic Economic Science

Keywords : Donative most-favored-nation pricing, Labor-managed firm

JEL classification : C72, D21, L13

Abstract

This paper considers a two-stage price-setting oligopoly model with labor-managed income-per-worker-maximizing firms. In the first stage, each firm non-cooperatively decides whether to offer a donative most-favored-nation policy as a strategic instrument. In the second stage, each firm non-cooperatively chooses its actual price. At the end of the second stage, the market opens and each firm sells at its actual price. The paper shows the role of the donative most-favored-nation policy as a practice facilitating coordination in the labor-managed oligopoly model.