Managers compensation and collusive behaviour under Cournot oligopoly
AbstractThe aim of the present paper is to show that the existence of a concrete outside option for ﬁrms’ executives can induce, under speciﬁc circumstances, every ﬁrm to adopt restrictive output practises. In particular, the paper characterizes the conditions for which, under Cournot oligopoly, existing ﬁrms behave more collusively than in a standard Cournot model. It is also shown that room exists for perfect and stable collusive agreements amongst ﬁrms. Other interesting ﬁndings are also twofold. Firstly, that the equilibrium executives’ pay will usually be dependent upon the number of companies initially disposing of the technology and/or of the organizational knowledge required to set up the business. Secondly, that companies’ procedures difficult to duplicate can constitute a beneﬁcial form of competition policy in that they induce the ﬁrms to behave less collusively in the product market
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1998002.
Date of creation: 01 Jan 1998
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More information through EDIRC
Managers’ Compensation; Oligopoly;
Other versions of this item:
- Marco, Marini, 1997. "Managers Compensation and Collusive Behaviour under Cournot Oligopoly," MPRA Paper 31871, University Library of Munich, Germany.
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- J00 - Labor and Demographic Economics - - General - - - General
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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