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
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Date of revision:
Contact details of provider:
Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
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, and Vacancies - - - 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-47, Supplemen.
- Jensen, Michael C & Murphy, Kevin J, 1990.
"Performance Pay and Top-Management Incentives,"
Journal of Political Economy,
University of Chicago Press, vol. 98(2), pages 225-64, April.
- Chaim Fershtman & Kenneth L Judd, 1984.
"Equilibrium Incentives in Oligopoly,"
642, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Murphy, Kevin J., 1985. "Corporate performance and managerial remuneration : An empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 7(1-3), pages 11-42, April.
- Stole, Lars A & Zwiebel, Jeffrey, 1996. "Intra-firm Bargaining under Non-binding Contracts," Review of Economic Studies, Wiley Blackwell, vol. 63(3), pages 375-410, July.
- Feinstein, Jonathan S. & Stein, Jeremy, 1988. "Employee opportunism and redundancy in firms," Journal of Economic Behavior & Organization, Elsevier, vol. 10(4), pages 401-414, December.
- Mailath, George J & Postlewaite, Andrew, 1990. "Workers versus Firms: Bargaining over a Firm's Value," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 369-80, July.
- Dubey, Pradeep & Mas-Colell, Andreau & Shubik, Martin, 1980. "Efficiency properties of strategies market games: An axiomatic approach," Journal of Economic Theory, Elsevier, vol. 22(2), pages 339-362, April.
- Marini, Marco, 1998. "Stable producer co-operatives in competitive markets," MPRA Paper 31925, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS).
If references are entirely missing, you can add them using this form.