The name is absent



max <
⅛<j>o


⅛- [f1 log(l + ⅛υ∙)) + μ2 log(l + kij)]
+⅛i [(ʃ'ʌ"1 - ʌ6) ɪθsd + ⅛∙)] - 4


(17)


We therefore obtain the following solution for the investment choices under employee
cooperative.

Lemma 14 If f' > 1, the equilibrium human capital investment levels under employee
cooperative are given by:

.Ec _ an ff ∖i , ʌ" I ɪ " ɑo
i> - ~2^ [ʃ ʌ + Tj + ~6~

(∕zλm + λ6) - 1.


Outside ownership

When f, 1 the bargaining solution under outside ownership is given by:

Agent:  employee E1  employee Ern  employee Eb  outside owner Oi customer Cij

share:  Vrl-V3     vm - υb      0           V2 - υm         vb

„    .     . Agent: employee E2 emplovee Ern employee Eb outside owner Oi

customer C

υb


if the firm hires Ei : or

share: υ2 — vb vm -vb O           V2 + vb — v2 — υm

if the firms hires E2.

These payoffs then translate into the following ex-ante investment choices for the em-
ployees. When
ff > 1 theʌ* choose klj to maximize:

max (≥i [f1 log(l + fcy)) + Λ2 log(l + kij}] +          log(l + ⅛y) - kij) (18)

⅛tj I ⅛                                                               â                                  J

We thus obtain the following solution for the investment choices under outside owner-
ship.

Lemma 15 The equilibrium human capital investment levels under outside ownership are
given by

k° = ɪ √'λ' + < +         - 1∙ iff' ≥ 1∙

That is. when the complementarity is strong, the outside ownership will under-invest.

Customer Cooperative

Wlien ∕' ≥ 1 we have:

Agent: employee F1 employee Em employee Eb customer-owner C
share:    V1 - V3 ' υm - υb         O         V2 + vb - vm

29



More intriguing information

1. The Clustering of Financial Services in London*
2. THE INTERNATIONAL OUTLOOK FOR U.S. TOBACCO
3. Unemployment in an Interdependent World
4. European Integration: Some stylised facts
5. The name is absent
6. An Incentive System for Salmonella Control in the Pork Supply Chain
7. The name is absent
8. Keynesian Dynamics and the Wage-Price Spiral:Estimating a Baseline Disequilibrium Approach
9. The name is absent
10. Howard Gardner : the myth of Multiple Intelligences