Endogenizing managerial delegation: A new result under Nash bargaining and network effects

Arbeitspapier

We reconsider the endogenous choice of delegation to a manager by two down-stream firms in both a Cournot and a Bertrand vertical market with network effects. An upstream monopolist charges a two-part tariff for a crucial input. By applying the Nash solution in a centralized bargaining, we show that hiring a manager is never an equilibrium under Cournot, regardless of network effects, while it can be the equilibrium choice for firms competing à la Bertrand, depending on the interplay between the network externalities and the degree of product substitutability.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EERI Research Paper Series ; No. 15/2019

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Transactional Relationships; Contracts and Reputation; Networks ; Business Objectives of the Firm
• Subject: Nash bargaining ; two-part tariff ; strategic delegation ; network externalities

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Scrimitore, Marcella
• Event: Veröffentlichung
• (who): Economics and Econometrics Research Institute (EERI)
• (where): Brussels
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/213550
• Last update: 10.03.2025, 11:44 AM CET