The Decision Whether to Hire Managers in a Mixed Duopoly with State-Owned and Labor-Managed Firms

Document Type: Original Research


Institute for Basic Economic Science, Osaka, Japan


This paper considers a mixed duopoly model in which a state-owned firm competes with a labor-managed firm. The timing of this game is as follows. In the first stage, each firm decides whether or not to hire a manager. In the second stage, the firms that hired managers select incentive parameters for them. In the third stage, firms compete in Cournot fashion. The paper presents the subgame perfect equilibrium of this model.


Bárcena-Ruiz, J. C. (2009). The decision to hire managers in mixed markets under Bertrand competition. Japanese Economic Review, 60, 376-388.
Basu, K. (1995). Stackelberg equilibrium in oligopoly: an explanation based on managerial incentives. Economics Letters, 49, 459-464.
Fernández-Ruiz, J. (2009). Managerial delegation in a mixed duopoly with a foreign competitor. Economics Bulletin, 29, 90-99.
Fumas, V. S. (1992). Relative performance evaluation of management: the effects on industrial competition and risk sharing. International Journal of Industrial Organization, 10, 473-489.
George, K., & La Manna, M. (1996). Mixed duopoly, inefficiency, and public ownership. Review of Industrial Organization, 11, 853-860.
Gunderson, M. (1979). Earnings differentials between the public and private sectors. Canadian Journal of Economics, 12, 228-242.
Kräkel, M. (2002). Delegation and strategic incentives for managers in contests. Managerial and Decision Economics, 23, 461-470.
Mujumdar, S., & Pal, D. (1998). Effects of indirect taxation in a mixed oligopoly. Economics Letters, 58, 199-204.
Nett, L. (1993). Mixed oligopoly with homogeneous goods. Annals of Public and Cooperative Economics, 64, 367-393.
Nett, L. (1994). Why private firms are more innovative than public firms. European Journal of Political Economy, 10, 639-653.
Ohnishi, K. (2008). International mixed duopoly and strategic commitments. International Economics and Economic Policy, 4, 421-432.
Ohnishi, K. (2018). Managerial delegation in an international mixed duopoly with price competition. In K. Ohnishi, Firms' Strategic Decisions: Theoretical and Empirical Findings, Volume 3 (pp. 144-153). Sharjah, UAE: Bentham Science Publishers.
Pal, D. (1998). Endogenous timing in a mixed oligopoly. Economics Letters, 61, 181-185.
Sklivas, S. (1987). The strategic choice of managerial incentives. Rand Journal of Economics, 18, 452-458.
White, M. D. (2001). Managerial incentives and the decision to hire managers in markets with public and private firms. European Journal of Political Economy, 17, 887-896.