Relative performance as a strategic commitment mechanism

Nolan Miller and Amit Pazgal
Additional contact information
Nolan Miller: John F. Kennedy School of Government, Harvard University, USA, Postal: John F. Kennedy School of Government, Harvard University, USA
Amit Pazgal: John M. Olin School of Business, Washington University, St. Louis, MO 63130, USA, Postal: John M. Olin School of Business, Washington University, St. Louis, MO 63130, USA

Managerial and Decision Economics, 2002, vol. 23, issue 2, 51-68

Abstract: Can managers' personality traits be of use to profit maximizing firm owners? We investigate the case where managers have a variety of attitudes toward relative performance that are indexed by their type. We consider two stage games where profit maximizing owners select managers in the first stage, and these managers, knowing each other's types, compete in a duopoly game in the second stage. The equilibria of various types of competition are derived and comparisons are made to the standard case where managers are profit maximizers. We show that managers' types can be used as a strategic commitment device that can increase firm profits in certain environments. Copyright © 2002 John Wiley & Sons, Ltd.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (91)

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1045 Link to full text; subscription required (text/html)

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:wly:mgtdec:v:23:y:2002:i:2:p:51-68

DOI: 10.1002/mde.1045

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().