Arbeitspapier
Indirect Evolution versus Strategic Delegation: A Comparison of Two Approaches to Explaining Economic Institutions
Two major methods of explaining economic institutions, namely by strategic choices or through (indirect) evolution, are compared for the case of a homogenous quadratic duopoly market. Sellers either can provide incentives for agents to care for sales, or evolve as sellers who care for sales in addition to profits. The two approaches are conceptually quite different, yet similar in the sense that both allow certain kinds of commitment. We show that when the two models are set up in intuitively comparable ways strategic delegation does not change the market results as compared to the usual duopoly solution, while indirect evolution causes a more competitive behavior. Thus the case at hand underscores the differences between the two approaches in explaining economic institutions.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 1998:9
- Classification
-
Wirtschaft
Noncooperative Games
Firm Behavior: Theory
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- Subject
-
Indirect evolution
strategic delgation
commitment
duopoly markets
agency theory
- Event
-
Geistige Schöpfung
- (who)
-
Dufwenberg, Martin
Güth, Werner
- Event
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Veröffentlichung
- (who)
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Uppsala University, Department of Economics
- (where)
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Uppsala
- (when)
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1998
- Handle
- URN
-
urn:nbn:se:uu:diva-2415
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Dufwenberg, Martin
- Güth, Werner
- Uppsala University, Department of Economics
Time of origin
- 1998
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