Strategic delegation and collusion: Do incentive schemes matter?

Jean-Daniel Guigou (), Patrick de Lamirande () and Bruno Lovat ()
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Jean-Daniel Guigou: Luxembourg School of Finance, University of Luxembourg
Bruno Lovat: University of Nancy

LSF Research Working Paper Series from Luxembourg School of Finance, University of Luxembourg

Abstract: This paper introduces delegation decisions and contracts based on relative performance evaluation (RPE) in the analysis of cartel stability. We follow the approach developed by Lambertini and Trombetta [12], where manager's compensation combines pro_ts and sales (CPS) instead. Some of our results are similar while others are distinct from those of Lambertini and Trombetta. In particular, we show that collusion under RPE is always harder to sustain than under CPS.

Keywords: Cartel Stability; Delegation; Relative Performance Evaluation (search for similar items in EconPapers)
JEL-codes: D43 L13 L21 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-bec and nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:crf:wpaper:11-02

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