In practice, governments in transition and other economies often retain some shares in privatized firms. For a two-firm differentiated-product oligopoly, we show how partial state ownership affects the firms' subsequent investment and output behavior. Hence, we determine how the optimum retained...

A model is developed in which an industry of firms is privatised. The 'participation' method of privatisation is used, whereby firms are sold for cash, but the state retains a proportionate share of ownership. In each firm the new private owner has the opportunity to make a reorganisational...

We analyze how intermittent large expenditures on family ceremonies may affect an entrepreneur's investment decision in an informal enterprise. Our hypothesis is that the barrier between family and enterprise is thin and permeable. We test this hypothesis using a survey from Sénégal that...

We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment and wage employment. We then introduce labour market segmentation. In...

An industry is modeled in which entrepreneurs, who are heterogeneous in ability, may produce formally or informally. It is shown how the formal-informal mix depends on the distribution of ability, product demand and a variety of parameters. The industry equilibrium is compared to one in which...

We model an urban labour market in a developing economy, incorporating workers’ risk attitudes. Trade-offs between risk aversion and ability determine worker allocation across formal and informal wage employment, and voluntary and involuntary self employment. Greater risk of informal wage...