Extended Games Played by Managerial Firms

Posted: 7 Sep 2000

See all articles by Luca Lambertini

Luca Lambertini

University of Bologna - Department of Economics

Abstract

The issue of timing is addressed in a game between managerial firms. The choice over timing can be taken either by managers or by entrepreneurs. It is shown that (i) delegation drastically modifies the owners' preferences concerning the distribution of roles, as compared with the setting where firms act as pure profit-maximizers; and (ii) the ability of moving first in the market game entails that, at least observationally, the owner of the leading firm prefers not to delegate. I show that the choice of the timing by managers entails the same profit that owners would achieve by specifying the timing in the delegation contract.

JEL Classification: D43, L13

Suggested Citation

Lambertini, Luca, Extended Games Played by Managerial Firms. Available at SSRN: https://ssrn.com/abstract=236246

Luca Lambertini (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 051 2092600 (Phone)
+39 051 2092664 (Fax)

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