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Biased-Manager Hiring in a Market with Network Externalities and Product Compatibility

Author

Listed:
  • Shih-Hao Huang

    (School of Management, Jiangsu University, Zhenjiang 212013, China)

  • Chien-Shu Tsai

    (Department of Fisheries Technology and Management, National Kaohsiung University of Science and Technology, Kaohsiung 811213, Taiwan)

  • Jen-Yao Lee

    (Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 807618, Taiwan)

  • Su-Ching Tsai

    (Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 807618, Taiwan)

Abstract

This paper studies biased-manager hiring in a market with network externalities and product compatibility. We show that the aggressivity of a biased manager has a non-linear relationship with product compatibility; however, since both owners want to hire aggressive managers, product compatibility is irrelevant to the type of manager the owner hires. In Cournot competition, product compatibility is crucial in alleviating the “prisoner’s dilemma” due to the net network effect of network externalities with product compatibility. In Bertrand competition, the “prisoner’s dilemma” is resolved when the augmented net network effect of product compatibility is large.

Suggested Citation

  • Shih-Hao Huang & Chien-Shu Tsai & Jen-Yao Lee & Su-Ching Tsai, 2025. "Biased-Manager Hiring in a Market with Network Externalities and Product Compatibility," Games, MDPI, vol. 16(2), pages 1-8, March.
    • Handle: RePEc:gam:jgames:v:16:y:2025:i:2:p:15-:d:1617245
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    References listed on IDEAS

    as
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    2. Domenico Buccella & Luciano Fanti & Luca Gori, 2023. "Strategic product compatibility in network industries," Journal of Economics, Springer, vol. 140(2), pages 141-168, October.
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