Incentive schemes as strategic variables: an application to a mixed duopoly

Fatima Barros
Additional contact information
Fatima Barros: CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium

No 1992036, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In a context of asymmetry of information between firms' owners and their managers, we investigate the use of incentive contracts as strategic variables in an oligopoly industry. Moreover, we consider that the government has the possibilityto intervene in the market by nationalizing an incumbent firm. In such framework a public firm can be used as an internal regulation mechanism . At the same time owners can use intrafirm contracting in a strategic way, taking advantage of the interaction among players. We conclude that government might have advantage in introducing a public firm in the market and if he does both firms' owners will always choose strategic contracts for their managers. Further, if firms decide on contracts sequentially we show that a private and a public firm would agree on the attribution of the leader role to the public firm.

Keywords: Mixed oligopoly; Strategic contracts; Asymmetry of information (search for similar items in EconPapers)
JEL-codes: D82 L13 L32 (search for similar items in EconPapers)
Date: 1992-06-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp1992.html (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:cor:louvco:1992036

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().