Managerial incentives and endogenous coalition formation with externalities

Keizo Mizuno

Mathematical Social Sciences, 2013, vol. 66, issue 1, 33-43

Abstract: This paper examines the managerial incentives of oligopolistic firms with Cournot competition when they have an opportunity to form a coalition for cost reduction. The analysis shows that the introduction of managerial incentives reduces a firm’s incentive to form a coalition. Moreover, a firm that belongs to a coalition has an increased managerial incentive (i.e., it becomes more sales-oriented) as its coalition becomes larger. However, in equilibrium, because of externalities generated from the coalition structure and product market competition, the managerial incentive of a firm in a large coalition can be greater than that of a firm in a grand coalition, while the managerial incentive of a firm in a small coalition can be less than that of a firm under stand-alone production.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016548961300005X
Full text for ScienceDirect subscribers only

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:eee:matsoc:v:66:y:2013:i:1:p:33-43

DOI: 10.1016/j.mathsocsci.2013.01.004

Access Statistics for this article

Mathematical Social Sciences is currently edited by J.-F. Laslier

More articles in Mathematical Social Sciences from Elsevier
Bibliographic data for series maintained by Catherine Liu ().