Competition and Cooperation within a Multidivisional Firm

Ramon Fauli-Oller and Magdalena Giralt

Journal of Industrial Economics, 1995, vol. 43, issue 1, 77-99

Abstract: The strategic choice of managerial incentives is studied in a multiagent setting using a two-stage game. In the first stage, the principal chooses incentive schemes. Then, agents make their decisions. The game models the structure of multidivisional firms; divisions (agents) are managed independently but the general office (principal) monitors their performance and provides incentives. It explains the rationale for establishing either cooperation or competition across divisions if firms face Cournot competition. If divisions are linked because of technological reasons (positive spillovers), cooperation should be stimulated. If they sell substitute products (negative spillovers), competition is needed. Copyright 1995 by Blackwell Publishing Ltd.

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1821%2819950 ... 0.CO%3B2-5&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:bla:jindec:v:43:y:1995:i:1:p:77-99

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().