A Note On Endogenous Timing With Strategic Delegation: Unilateral Externality Case
AbstractWe investigated the endogenous choice of roles by managerial firms in the presence of unilateral externality. The choice over timing can be taken either by managers or by owners. It is shown that (i) the choice of the timing by managers entails the same profit that owners would have achieved by specifying the timing in the delegation contract; and (ii) firms move simultaneously if the degree of unilateral externality is small, while sequentially if the degree of unilateral externality is large, with the firm generating unilateral externality as a follower; the owner of the follower firm delegates to restrict output, while his/her counterpart does not delegate it.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Bulletin of Economic Research.
Volume (Year): 64 (2012)
Issue (Month): 2 (04)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0307-3378
Other versions of this item:
- Yuanzhu Lu & Kangsik Choi, 2010. "A Note on Endogenous Timing with Strategic Delegation: Unilateral Externality Case," CEMA Working Papers 390, China Economics and Management Academy, Central University of Finance and Economics.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
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