Endogenous timing in a mixed duopoly: price competition with managerial delegation

Yasuhiko Nakamura and Tomohiro Inoue
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Tomohiro Inoue: Faculty of Political Science and Economics, Waseda University, Tokyo, Japan, Postal: Faculty of Political Science and Economics, Waseda University, Tokyo, Japan

Managerial and Decision Economics, 2009, vol. 30, issue 5, 325-333

Abstract: We introduce a managerial delegation contract into the mixed duopoly model and examine its influence on price setting in a mixed duopoly in the context of the endogenous-timing problem. We obtain the result that owners of a public and a private firm prefer to delay the setting of the prices of their products as much as possible. Thus, in equilibrium, the firms choose their prices simultaneously in the latter stage of the game. This is in contrast to the findings of the entrepreneurial case, according to which firms choose prices simultaneously in the former stage. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:30:y:2009:i:5:p:325-333

DOI: 10.1002/mde.1455

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