Strategic Delegation under Cost Asymmetry

Delbono , Flavio ; Lambertini, Luca ; Marattin, Luigi (2015) Strategic Delegation under Cost Asymmetry. Bologna: Dipartimento di Scienze economiche DSE, p. 12. DOI 10.6092/unibo/amsacta/4309. In: Quaderni - Working Paper DSE (1016). ISSN 2282-6483.
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Abstract

We revisit the two-stage duopoly game with strategic delegation and asymmetric technologies of Sen and Stamatopoulos (2015). We show that their conclusions are misled by the restrictive assumption that the extent of delegation to managers is restricted to a binary set. Allowing for a continuous set of delegation incentives, we prove that the delegation stage is a prisoners dilemma, the unique subgame perfect equilibrium entailing both firms hiring managers. At equilibrium, the more efficient firm makes higher profits.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Delbono , Flavio
Lambertini, Luca
Marattin, Luigi
Keywords
managerial firms, Cournot competition, prisoners dilemma
Subjects
ISSN
2282-6483
DOI
Deposit date
17 Jul 2015 08:25
Last modified
24 Feb 2016 08:57
URI

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