This paper examines an international mixed model in which a domestic state-owned welfare-maximizing public firm competes against a foreign labor-managed income-per-worker-maximizing private firm. In the first stage, each firm independently decides whether or not to make a commitment to capacity....

This paper examines the behaviors of a profit-maximizing private firm and a socialwelfare- maximizing public firm in a mixed market model with a lifetime employment contract as a strategic commitment. The paper then shows that there exists an equilibrium in which the private firm enters into a...