COMPARATIVE DYNAMICS IN THE LABOR-MANAGED MODEL OF THE FIRM

A general intertemporal model of the labor-managed firm is developed, and a short-run and long-run comparative dynamic analysis is carried out. In the short-run, no perverse comparative dynamic results occur. In fact, the short-run comparative dynamic properties of the model closely resemble those of a static profit-maximizing firm. In contrast, the long-run comparative dynamics admit more general perversions than those so noted in the static literature, as the refutable implications are embodied in the cumulative discounted per capita demand and supply functions. The comparative dynamics, whether in the short- or long-run, are summarized in a symmetric positive semidefinite matrix. © 1992.