Our product is unique: A note on a delegation game with differentiated products

Arbeitspapier

We analyze a Cournot duopoly market with differentiated goods and the separation between ownership and control. We consider a delegation game, for which the owner of a firm hires a manager who acts as if the good has a lower degree of substitutability than it really has. This is so either because managers are biased and perceive the good in this way, or because firms design an incentive scheme accordingly, which leads the manager to act in this way. Both firms rely on delegation. We discuss conditions, which lead one firm to increase its profit implying that the usual result of a prisoners' dilemma is avoided.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAAEU Discussion Paper Series in Economics ; No. 02/2021

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Externalities ; Oligopoly and Other Imperfect Markets
• Subject: Strategic Delegation ; Managerial Incentives ; Oligopoly

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Buchen, Clemens ; Hartmann, Sven A. ; Palermo, Alberto
• Event: Veröffentlichung
• (who): University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU)
• (where): Trier
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/236621
• Last update: 10.03.2025, 11:43 AM CET