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Strategic delegation effects on Cournot and Stackelberg competition
University of Piraeus, Economics Department, 80 Karaoli & Dimitriou Strs., 185 34, Greece |
This paper compares the outcomes of two three-stage games of two firms competing for quantity with managerial delegation. In fact, we prove that simultaneous choice of managers by the proprietors of the firms followed by Stackelberg-type competition is equivalent to sequential choice of managers followed by Cournot-type competition. We prove equivalence in a general setting, namely, when the duopolistic model is characterised by a non-linear inverse demand function of the form $p_i = a-(q_i)^n-γ (q_j)^n$, $i,j = 1,2$ and $n∈\mathbb{N}$.
References:
| [1] |
C. Fershtman and K. L. Judd,
Equilibrium incentives in oligopoly, American Economic Review, 77 (1987), 927-940.
|
| [2] |
E. Gal-Or,
First mover and second mover advantages, International Economic Review, 26 (1985), 649-653.
doi: 10.2307/2526710. |
| [3] |
M. Kopel and C. Löffler,
Commitment, first-mover and second-mover advantage, Journal of Economics, 94 (2008), 143-166.
|
| [4] |
S. Sklivas,
The strategic choice of managerial incentives, Rand Journal of Economics, 18 (1987), 452-458.
|
| [5] |
G. Stamatopoulos,
Cournot and Stakelberg equilibrium under strategic delegation: an equivalence result, Theory and Decision, 81 (2016), 553-570.
doi: 10.1007/s11238-016-9548-x. |
| [6] |
J. Vickers,
Delegation and the theory of the firm, Economic Journal, 95 (1985), 138-147.
|
show all references
References:
| [1] |
C. Fershtman and K. L. Judd,
Equilibrium incentives in oligopoly, American Economic Review, 77 (1987), 927-940.
|
| [2] |
E. Gal-Or,
First mover and second mover advantages, International Economic Review, 26 (1985), 649-653.
doi: 10.2307/2526710. |
| [3] |
M. Kopel and C. Löffler,
Commitment, first-mover and second-mover advantage, Journal of Economics, 94 (2008), 143-166.
|
| [4] |
S. Sklivas,
The strategic choice of managerial incentives, Rand Journal of Economics, 18 (1987), 452-458.
|
| [5] |
G. Stamatopoulos,
Cournot and Stakelberg equilibrium under strategic delegation: an equivalence result, Theory and Decision, 81 (2016), 553-570.
doi: 10.1007/s11238-016-9548-x. |
| [6] |
J. Vickers,
Delegation and the theory of the firm, Economic Journal, 95 (1985), 138-147.
|
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