Download This PaperOn the Observational Equivalence of Unilateral Delegation Contracts in Duopoly
Quaderni - Working Paper DSE N° 1033
12 Pages Posted: 7 Oct 2015
Date Written: October 6, 2015
Abstract
In a Cournot duopoly, if only one firm hires a manager while the other remains entrepreneurial, the Cournot-Stackelberg equilibrium emerges, with the managerial firm as the leader. This happens under at least three different delegation schemes. We illustrate the different meachanisms driving this outcome through the analysis of the map of best replies at the market stage.
Keywords: delegation, comparative performance, market share, sales, Cournot competition
JEL Classification: D43, L13, L21
Suggested Citation: Suggested Citation
Delbono, Flavio and Lambertini, Luca, On the Observational Equivalence of Unilateral Delegation Contracts in Duopoly (October 6, 2015). Quaderni - Working Paper DSE N° 1033, Available at SSRN: https://ssrn.com/abstract=2670000 or http://dx.doi.org/10.2139/ssrn.2670000
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