Strategic delegation under rational and fulfilled expectations in quantity competition

Yasuhiko Nakamura

Applied Economics Letters, 2022, vol. 29, issue 4, 303-306

Abstract: In an asymmetric duopoly with quantity competition such that consumers form expectations about network sizes before and after the owners of both firms choose their incentive parameters (fulfilled and rational expectations, respectively), this paper reconsidered the level of their incentive parameters adopting the approach emplyed in two important existing works in this field. In quantity competition, we demonstrate that in such an asymmetric duopoly, the owners of both firms make their managers more aggressive than their sole profit maximizers, regardless of the strength of network effects.

Date: 2022
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DOI: 10.1080/13504851.2020.1866150

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