Managerial Incentives and Stackelberg Equilibria in Oligopoly

Marcella Scrimitore

MPRA Paper from University Library of Munich, Germany

Abstract: The paper investigates both quantity and price oligopoly games in markets with a variable number of managerial and entrepreneurial firms which defines market structure. Following Vickers (Economic Journal, 1985) which establishes an equivalence between the equilibrium under unilateral delegation and the Stackelberg quantity equilibrium, the outcomes of these games are compared with the ones in sequential multi-leaders and multi-followers games. The profitability of a managerial/entrepreneurial attitude vs leadership/followership is shown to critically depend upon the kind of strategy, price or quantity, and upon the assumed market structure. Indeed, the latter turns out to be crucial in determining the equivalence result that is shown to be contingent on the assumption that just one leader or one managerial firm operate in the market. A welfare analysis finally highlights the differences between the delegation and the sequential games, focusing on the impact of market structure and imperfect substitutability on the equilibria of the two games.

Keywords: Strategic delegation; sequential games; quantity and price competition; welfare analysis (search for similar items in EconPapers)
JEL-codes: C72 L13 L22 (search for similar items in EconPapers)
Date: 2010-08
New Economics Papers: this item is included in nep-bec and nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/24245/1/MPRA_paper_24245.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/24805/1/MPRA_paper_24805.pdf revised version (application/pdf)

Related works:
Working Paper: Managerial Incentives and Stackelberg Equilibria in Oligopoly (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:pra:mprapa:24245

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().