Workers’ Enterprises Are Not Perverse: Differential Oligopoly Games with Sticky Price

We take a differential game approach to study the dynamic behaviour of labour managed (LM) firms, in the presence of price stickiness. We find that the oligopoly market populated by LM firms reaches the same steady state equilibrium allocation as the oligopoly populated by profit-maximising (PM) firms, provided that the LM membership and the PM labour force are set before the market game starts. The conclusion holds under both the open-loop solution and the closed-loop solution. The result confirms the point made by Sertel (Eur Econ Rev 31:1619–1625, 1987) in a static framework