TITLE:
Labor Investment in a New International Mixed Market
AUTHORS:
Kazuhiro Ohnishi
KEYWORDS:
Lifetime Employment Contract, Continuous-Time Dynamic Model, Domestic Public Firm, Foreign Private Firm
JOURNAL NAME:
Technology and Investment,
Vol.1 No.2,
May
25,
2010
ABSTRACT: This paper considers a continuous-time dynamic mixed market model of labor investment decisions of a domestic public firm and a foreign private firm. The paper studies the optimal levels of preemptive investment for the long-run structure of the international mixed market. It is then demonstrated that there are no perfect equilibria in which neither firm invests to its steady-state reaction curve.