Strategic delegation in an experimental mixed duopoly

Ninghua Du, John Heywood and Guangliang Ye

Journal of Economic Behavior & Organization, 2013, vol. 87, issue C, 91-100

Abstract: We provide the first experimental test of the consequences of delegation in a mixed duopoly. Such delegation allows a profit maximizing private owner and a welfare maximizing public owner to weight sales in managerial contracts. Theory predicts that such contracts improve welfare. Our evidence indicates that both public and private subject owners do provide a weight on sales consistent with the subgame perfect equilibrium. Critically, however, this emerges in the experiment only when playing with a robot manager and when playing with a human subject manager after the experience of playing with a robot manager.

Keywords: Mixed duopoly; Incentive contract; Experiment markets (search for similar items in EconPapers)
JEL-codes: H11 L13 L32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:87:y:2013:i:c:p:91-100

DOI: 10.1016/j.jebo.2013.01.006

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