Publication
Title
A note on strategic delegation: the market share case
Author
Abstract
We consider a two-stage market share delegation game with two competing firms. Each owner delegates the production decision to a manager. Each manager's remuneration is a weighted sum of profits and market share. The market share delegation game results in higher duopoly profits than the sales delegation game. Both output delegation models lead to more aggressive managerial behavior than the standard Cournot case, implying lower profitability and higher social welfare: similar results are obtained for the Bertrand version of the delegation model. Market share delegation is the dominant strategy in a game in which owners can choose not to hire a manager or, if they do so, to pay their manager a bonus based on profits and sales or market share.
Language
English
Source (journal)
International journal of industrial organization. - Amsterdam
Publication
Amsterdam : 2007
ISSN
0167-7187
Volume/pages
25:3(2007), p. 531-539
ISI
000246231900006
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 29.04.2010
Last edited 17.11.2017
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