Title

Search, selection, and shortage in an industry composed of labor-managed firms

Document Type

Article

Date of Original Version

1-1-1986

Abstract

Evolutionary models of an industry composed of labor-managed firms are constructed. In these models, search or selection processes-in the sense of Nelson and Winter-determine what production techniques are used. If certain types of subsidies are introduced into these models, shortage-in the sense of Kornai-results. How search and selection processes promote use of cost-minimizing techniques and how subsidies may stifle or deflect these processes is investigated through ten propositions. These propositions are applied to illuminate Yugoslavia's slow adjustment to increases in the relative price of oil. © 1986.

Publication Title

Journal of Comparative Economics

Volume

10

Issue

1

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