Strategic delegation in oligopolistic tournaments

Matthias Kräkel

Review of Economic Design, 2005, vol. 9, issue 4, 377-396

Abstract: This paper considers a two-stage game with two owners and two managers. At the first stage, the owners choose a linear combination of profits and sales as incentives for their managers. At the second stage, the two managers compete in an oligopolistic tournament against each other. The findings substantially differ from the results for Cournot or Bertrand oligopoly: There exist asymmetric equilibria where one owner puts a positive weight on sales and the other a negative one, although the structure of the game is completely symmetric. If the influence of noise vanishes, the owner of the more aggressive firm will even induce sales maximization to his manager in order to preempt his competitor. Copyright Springer-Verlag Berlin/Heidelberg 2005

Keywords: Managerial incentives; oligopoly; strategic delegation; tournaments (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10058-005-0136-8 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reecde:v:9:y:2005:i:4:p:377-396

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10058

DOI: 10.1007/s10058-005-0136-8

Access Statistics for this article

Review of Economic Design is currently edited by Atila Abdulkadiroglu, Fuhito Kojima and Tilman Börgers

More articles in Review of Economic Design from Springer, Society for Economic Design
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().