Strategic Delegation in Experimental Markets

Steffen Huck, Wieland Müller and Hans-Theo Norman

No 290, CESifo Working Paper Series from CESifo

Abstract: In this experiment, we analyze strategic delegation in a Cournot duopoly. Owners can choose among two different contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits, while the second contract gives an additional sales bonus. Although theory predicts the second contract to be chosen, it is only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the subgame perfect equilibrium prediction when asymmetric contracts are given.

Keywords: Strategic delegation; managerial incentives; experimental economics (search for similar items in EconPapers)
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo_wp290.pdf (application/pdf)

Related works:
Journal Article: Strategic delegation in experimental markets (2004)
Working Paper: Strategic delegation in experimental markets (2004)
Working Paper: Strategic delegation in experimental markets (2000)
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:ces:ceswps:_290

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().