Competition within firms

Lisa Bruttel and Simeon Schudy

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: We investigate the role of incentives set by a parent firm for competition among its subsidiaries. In a Cournot experiment, four subsidiaries of the same parent operate in the same market. Parents earn a specific share of the joint profit, and can choose how to distribute the remaining surplus (or loss). Results show that parents allocating profits equally among their subsidiaries reach outcomes close to collusion. However, almost half of the parent firms employ a proportional sharing rule instead. These groups end up with profits around the Cournot level.

Date: 2012
References: Add references at CitEc
Citations:

Published in Journal of Competition Law and Economics 1 8(2012): pp. 167-185

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: COMPETITION WITHIN FIRMS (2012)
Working Paper: Competition within firms (2010)
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:lmu:muenar:19990

Access Statistics for this paper

More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().