Endogenous Timing in a Quantity-Setting Mixed Duopoly with State-Owned and Labor-Managed Firms

This paper considers a model in which a state-owned firm competes with a labor-managed firm. There are two production stages, and the firms first announce in which stage they will choose output. Next, if both firms choose the same stage, a simultaneous move game occurs, whereas if both firms choose different stages, a sequential move game arises. The paper shows that the unique equilibrium coincides with the Stackelberg solution in which the labor-managed firm is the leader. As the result, we find that the state-owned firm cannot play the role of Stackelberg leader.