This paper examines industry structure and welfare performance in a general equilibrium model of labor-management when there is imperfect competition. Circumstances in which the equilibrium of the labor-managed economy can contain a larger number of firms than the ‘twin’ profit-maximizing economy, and in which this extra product diversity results in the labor-managed system providing a higher level of welfare than the ‘twin’ economy, are shown. The results support the use of a general equilibrium specification. Some differences in household behavior in the two types of economy are also noted.
