A note on strategic delegation: The market share case

Jansen, Thijs; Lier, Arie van; Witteloostuijn, A. van

doi:10.1016/j.ijindorg.2006.04.017

Cited by 164 publications

(177 citation statements)

References 13 publications

(15 reference statements)

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“…Moreover, we also follow the standard assumption by managerial delegation theory that the fixed component (salary) of the manager pay is chosen by the firm's owner such that the manager exactly gets his/her opportunity cost, which is normalised to zero. More specifically, following for instance Vickers (1985), Jansen et al (2007Jansen et al ( , 2009), Fanti and Meccheri (2013), Meccheri and Fanti (2014), manager i receives a bonus that is proportional to…”

Section: The Model With Managerial Firmsmentioning

confidence: 99%

Corporate social responsibility, profits and welfare with managerial firms

Fanti

Buccella

2017

Int Rev Econ

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This paper analyses the equilibrium outcomes in a duopoly market where firms follow corporate social responsibility (CSR) behaviours under managerial delegation. It is shown that in the subgame perfect Nash equilibrium of the game, both firms emerge as CSR-type, and the firms' profitability (resp. the welfare of consumers and society) are beneficiated (resp. harmed) by the CSR behaviour. This result is in sharp contrast with the conventional result (established under nonmanagerial firms) that the higher the CSR sensitivity to consumer surplus, the lower (resp. higher) the firms' profitability (resp. the consumer surplus and social welfare).

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Section: The Model With Managerial Firmsmentioning

confidence: 99%

Corporate social responsibility, profits and welfare with managerial firms

Fanti

Buccella

2017

Int Rev Econ

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“…The literature on delegation studies has established that the owner offers an incentive contract including sales revenue (Vickers, 1985;Fershtman and Judd, 1987;Sklivas, 1987), market share (Jansen et al, 2007), and a rival firm's profit (Aggarwal and Samwick, 1999). This paper studies the delegation game in which the firm's owner offers the manager a contract taking considering the weighted average of profit and either consumer surplus or social welfare.…”

Section: Introductionmentioning

confidence: 99%

Corporate social responsibility and strategic relationships

Hino

Zennyo

2017

Int Rev Econ

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We analyze a delegation game relevant to the conduct of corporate social responsibility (CSR) in which the firm's owner offers the manager a contract consisting of firm profit and social welfare. We derive three results that distinctly differ from existing findings. First, CSR decisions are strategic complements for firms. Second, with simultaneous CSR decisions, the equilibrium price is equal to marginal cost, despite the fact that firms compete in a Cournot duopoly. Finally, with sequential CSR decisions, unlike the follower firm, the leader firm never exhibits CSR. However, the follower firm can enjoy a profit equal to that derived by the leader in a Cournot-Stackelberg game.

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“…From (12), note that i = 0 for = 1. Therefore, one should expect marginal cost pricing to arise if …rms supply perfect substitutes.…”

Section: First Order Conditions and Limit Propertiesmentioning

confidence: 99%

“…Comparative performance evaluation (Miller and Pazgal, 2001); pro…ts and market share (Jansen et al, 2007;Ritz, 2008). …”

Section: Introductionmentioning

confidence: 99%

On the (Non) Existence of a Price Equilibrium in Delegation Games with Relative Performance Compensation

Kopel

Lambertini

2012

SSRN Journal

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We show that Miller and Pazgal's (2001) model of strategic delegation, in which managerial incentives are based upon relative performance, is a¤ected by a non-existence problem which has impact on the price equilibrium. The undercutting incentives generating this result are indeed similar to those a¤ecting the stability of price cartels. JEL Codes: C73, L13Keywords: managerial …rms, Bertrand competition, delegation, equilibrium existenceWe thank Giacomo Calzolari, Massimo Marinacci and the audience at RCEF 2010 (Rimini) for helpful comments and discussions. The usual disclaimer applies.

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A note on strategic delegation: The market share case

Cited by 164 publications

References 13 publications

Corporate social responsibility, profits and welfare with managerial firms

Corporate social responsibility, profits and welfare with managerial firms

Corporate social responsibility and strategic relationships

On the (Non) Existence of a Price Equilibrium in Delegation Games with Relative Performance Compensation

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