Economics at your fingertips  

Network Externalities and Strategic Managerial Delegation in Cournot Duopoly: Is There a Prisoners’ Dilemma?

Bhattacharjee Trishita and Rupayan Pal ()

Review of Network Economics, 2014, vol. 12, issue 4, 343-353

Abstract: This paper analyzes the implications of network externalities on strategic managerial delegation contracts in a Cournot duopoly. It shows that, in the presence of strong network externalities, firms obtain higher profits in the equilibrium under strategic managerial delegation compared with that under no-delegation. Unlike as in the case of weak or no network externalities, owners of firms do not face a Prisoners’ Dilemma type of situation while deciding incentive schemes – sales-oriented vis-à-vis based on profits only – for managers in the presence of strong network externalities. However, both consumers’ surplus and social welfare are higher in the equilibrium under strategic managerial delegation compared to those under no delegation, irrespective of the strength of network externalities.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed

Downloads: (external link) ... -0114.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Review of Network Economics is currently edited by Julian Wright

More articles in Review of Network Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

Page updated 2019-06-22
Handle: RePEc:bpj:rneart:v:12:y:2014:i:4:p:343-353:n:3