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Social performance versus relative performance evaluation, asymmetric costs, and quantity competition under managerial delegation

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  • Jumpei Hamamura
  • Vinay Ramani

Abstract

This paper considers asymmetric performance evaluation measures in a duopoly with asymmetric costs and managerial delegation under quantity competition. Asymmetry along performance measures as well as cost leads to a several surprising results. First, we find that the social performance firm with a cost advantage earns a larger profit than its rival under a specific economic environment. Second, when the relative performance firm has the cost advantage, both firms adopt a less aggressive strategy under specific conditions, while the relative performance firm always earns a larger profit than its rival.

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  • Jumpei Hamamura & Vinay Ramani, 2023. "Social performance versus relative performance evaluation, asymmetric costs, and quantity competition under managerial delegation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1706-1719, April.
  • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:3:p:1706-1719
    DOI: 10.1002/mde.3777
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