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

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.