Allocative and distributional effects of a monopolistic cooperative firm in a capitalist economy

Esther Gal-Or, Michael Landsberger, Abraham Subotnik

Research output: Contribution to journalArticlepeer-review

Abstract

It is well known that labor-managed firms operating under socialism exhibit "bizarre" behavior with respect to their production strategy. We prove that under capitalism most of these distortions disappear, consequently, the production strategies of an entrepreneurial monopoly and of the labor-managed firm become indistinguishable. However, there appears an almost inherent instability in the distribution of profits. The degree of instability depends on the existence of some sort of supportive legislation. Thus, unlike under socialism, in a capitalistic economy the labor-managed firm may have an effect on the distribution of profits at most.

Original languageEnglish
Pages (from-to)158-172
Number of pages15
JournalJournal of Comparative Economics
Volume4
Issue number2
DOIs
StatePublished - Jun 1980

ASJC Scopus subject areas

  • Economics and Econometrics

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