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Intrafirm conflicts and interfirm competition

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  • Güth, Werner
  • Pull, Kerstin
  • Stadler, Manfred

Abstract

We study strategic interfirm competition allowing for internal conflicts in each seller firm. Intrafirm conflicts are captured by a multi-agent framework with principals implementing a revenue sharing scheme. For a given number of agents, interfirm competition leads to a higher revenue share for the agents, higher equilibrium effort levels and higher agent utility, but lower profits for the firms. The winners from antitrust policy are thus not only the consumers but also the agents employed by the competing firms. --

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Bibliographic Info

Paper provided by University of Tuebingen, Faculty of Economics and Social Sciences in its series University of Tuebingen Working Papers in Economics and Finance with number 14.

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Date of creation: 2011
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Handle: RePEc:zbw:tuewef:14

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Keywords: agency theory; strategic interfirm competition; revenue sharing;

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  6. Fershtman, Chaim, 1985. "Managerial incentives as a strategic variable in duopolistic environment," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 3(2), pages 245-253, June.
  7. Klaus Ritzberger & Werner Güth, 1998. "On durable goods monopolies and the Coase-Conjecture," Review of Economic Design, Springer, Springer, vol. 3(3), pages 215-236.
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  14. Werner Güth & Rene Levínský & Kerstin Pull & Ori Weisel, 2010. "Tournaments and Piece Rates Revisited: A Theoretical and Experimental Study of Premium Incentives," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2010-039, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  15. Jensen, M.C. & Murphy, K.J., 1988. "Performance Pay And Top Management Incentives," Papers, Rochester, Business - Managerial Economics Research Center 88-04, Rochester, Business - Managerial Economics Research Center.
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Cited by:
  1. Güth, Werner & Pull, Kerstin & Stadler, Manfred, 2014. "Delegation, worker compensation, and strategic competition," University of Tuebingen Working Papers in Economics and Finance 67, University of Tuebingen, Faculty of Economics and Social Sciences.
  2. Andreas Hildenbrand & Mihael Duran, 2013. "The Role of Managerial Work in Market Performance: A Monopoly Model with Team Production," MAGKS Papers on Economics, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 201353, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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