Lifetime Employment and Mixed Cournot Duopoly with State-Owned and Joint-Stock Firms

This paper examines a mixed duopoly model in which a state-owned firm competes with a joint-stock firm. The following two stages are considered. In the first stage, each firm can simultaneously and independently decide whether or not to offer lifetime employment as a strategic commitment. In the second stage, each firm simultaneously and independently chooses its actual output. The paper shows that there are two equilibrium solutions in the model.