corporate social responsibility and reaction functions of labor-managed firms with lifetime employment as strategic commitment

This paper examines an oligopoly game model with a concave demand function where labor-managed firms compete in quantities with each other. there is no possibility of entry or exit. the timing of the game is as follows. in the first stage, each labor-managed firm simultaneously and independently chooses the level of social concern. in the second stage, each labor-managed firm simultaneously and independently chooses whether to offer lifetime employment as a strategic commitment device. in the third stage, quantity competition takes place. this paper examines the reaction functions of labor-managed firms in the model. first, the paper presents the reaction functions of labor-managed firms in the game model. it is shown that the reaction functions of labor-managed firms have both upward and downward sloping cases. next, the paper provides a simple example to support the above result. this example shows a case in which the reaction functions of labor-managed firms are downward-sloping.