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

Yasuhiko Nakamura and 井上智弘 ()
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Yasuhiko Nakamura: Graduate School of Economics, Waseda University, Tokyo, Japan, Postal: Graduate School of Economics, Waseda University, Tokyo, Japan

Managerial and Decision Economics, 2009, vol. 30, issue 5, pages 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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