Workers' enterprises in imperfect competition

Sertel, Murat R.

doi:10.1016/0147-5967(91)90008-h

Cited by 47 publications

(28 citation statements)

References 10 publications

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“…as it can be easily ascertained by comparing (32) with (19). That is, the viability condition for a generic PM firm also ensures that the equilibrium individual value added inside any WE firm be incentive compatible.…”

Section: The Pm Oligopolymentioning

confidence: 95%

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Workers’ enterprises are not perverse: differential oligopoly games with sticky price

Cellini

Lambertini

2006

Rev. Econ. Design

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Section: The Pm Oligopolymentioning

confidence: 95%

“…Provided that the size of the membership (i.e., the number of participants) is decided upon prior to investment and output decisions, the WE firm ultimately replicates the performance of a PM firm irrespective of the intensity of market competition (Sertel, 1991(Sertel, , 1993.…”

Section: Introductionmentioning

confidence: 99%

Workers’ enterprises are not perverse: differential oligopoly games with sticky price

Cellini

Lambertini

2006

Rev. Econ. Design

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“…Since (β−1) β < 1, by comparing (15) and (11), we notice that in the short run the WE operates only in the descending branch of the average cost curve to the left of the minimum. That is:…”

Section: Appendixmentioning

confidence: 99%

“…These reactions, deemed as "perverse", have been cast within the original modelling of the LMF (Ward, 1958;Vanek, 1970) and are still quite popular even though they lack realism since they are based on the assumption that, in the short term, an LMF changes, as a result of market signals, the membership size decided at the foundation. This weakness has been amended by the proponents of the new theory of Workers' Enterprises (WE ) (Sertel, 1987;1991;Fehr and Sertel, 1993). WE s, based on the evolution of the traditional LMF underpinning, are quite similar to LMFs, but for membership, that can follow two alternative arrangements.…”

Section: Prologuementioning

confidence: 99%

Are Workers' Enterprises Entry Policies Conventional

Moretto

Rossini

2007

SSRN Journal

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One of the main reasons why workers' enterprises (WE ) still represent a relevant chunk of the economy may lay in some affinities with conventional profit maximizing firms. To prove this, we compare the entry policies of WEs and conventional firms when they can decide size at entry while having to stick to it afterwards. Even though short run differences remain, a long run coincidence appears besides that under certainty. Endogenizing size and time of entry in an uncertain dynamic environment we see that WEs enter at the same trigger and size of conventional firms. Both of them wait less and choose a dimension larger than the minimum efficient scale. This may be another way to explain why WE are still an important share of the economy (Hesse and Cihàk, 2007) despite the ongoing mantra of their imminent demise.JEL Classification: G13, J54, L3

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“…6 Here, we analyze entry strategies of …rms belonging either to the NFs 5 See the canonical models of Ward (1958), Vanek (1970), the re…nements of Pestieau and Thisse (1979), the empirical scrutiny of Pencavel and Craig (1994), the analysis of LMF oligopolies in Delbono and Rossini (1992), workers' enterprises in Sertel (1993), just to mention few contributions. 6 The theory of the LMF has evolved quite a lot in parallel with the growing success of market economies vis à socialist economies.…”

Section: Lmf the Question Then Boils Down To What Are The Implicatiomentioning

confidence: 99%

Start-up Entry Strategies: Employer vs. Nonemployer Firms

Moretto

Rossini

2005

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Start-up Entry Strategies: Employer vs. Nonemployer firms SummaryFrom 1997 to 2001 we observe in the Usa a faster growth in the number of Nonemployer firms (NF) vis à vis Employer firms (EF). The diverse speed of net entry may be due to particular internal organisation of the two types of firms and the effect that this has on the reactions to market uncertainty. However, the set of internal organizations of firms is larger than that made up simply by EFs and NFs, in particular among newborn firms, since we observe corporate start-ups with employees, firms owned and managed by their founders who are simultaneously the employees and, finally, non corporate enterprises. The second class of firms mostly belongs to the category of NFs, according to US nomenclature, while non corporate firms may belong to either category. Our curiosity is attracted by different entry patterns of NFs and EFs and our aim is to interpret them. According to recent literature, firms carry out an irreversible investment, such as entry, only if market prices are strictly larger than average total costs (Marshallian point). However, the trigger price that makes firms become active is affected by institutional rules, the existence of profit sharing, efficiency wages, exit options -i.e. partial reversibility -, financial constraints. Then, the internal organization of a newborn firm may make the difference. In a continuous time stochastic environment, where firms bear a sunk cost, we model entry as a growth option. On the trace of distinct objective functions we show that NFs and EFs have specific entry patterns in terms of output price and/or size. Why? Simply because they react in diverse fashions to market price volatility. In this sense we are able to show that, in most cases, the NF is locally less risky. This makes the NF better suited to enter under conditions of higher volatility. This exactly corresponds to what happened during the years between 1997-2001.

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Workers' enterprises in imperfect competition

Cited by 47 publications

References 10 publications

Workers’ enterprises are not perverse: differential oligopoly games with sticky price

Workers’ enterprises are not perverse: differential oligopoly games with sticky price

Are Workers' Enterprises Entry Policies Conventional

Start-up Entry Strategies: Employer vs. Nonemployer Firms

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