COMPARATIVE ECONOMIC-PERFORMANCE OF CONVENTIONAL AND PROFIT-SHARING FIRMS

This paper compares the various economic properties of conventional fi rms and profit-sharing firms. The properties contrasted include wage l evel, employment, output price, total economic rents and industry effi ciency. The firms operate in an oligopolistic industry with a labor un ion. In general, profit-sharing firms outperform non-sharing firms. Ho wever, there exist counterexamples in which non-sharing firms can outp erform sharing firms. To test the robustness of the results, the analy sis is conducted for a variety of oligopolistic industries: quantity-s etting, price-setting and joint collusion.