R&D spillovers and strategic delegation in oligopolistic contests
Considering oligopolistic contests with R&D spillovers and strategic delegation three results can be obtained: (1) There exist multiple asymmetric equilibria where one owner highly favors sales as a basis for his manager's incentives which drives the other firm out of the market. (2) If R&D spillovers are zero, a managerial firm will have a strong strategic advantage when competing with an entrepreneurial firm. If both owners endogenously decide about delegation, each owner's dominant strategy will be to delegate, given that the manager's reservation value is not too large. (3) If R&D spillovers are maximal, collusive market outcomes become very likely, which makes strategic delegation less important. Copyright © 2004 John Wiley & Sons, Ltd.
Volume (Year): 25 (2004)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976|
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.:
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Huck, Steffen & Konrad, Kai A. & Müller, Wieland, 2000.
"Divisionalization in contests,"
SFB 373 Discussion Papers
2000,9, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Richard Schmalensee, 1976. "A Model of Promotional Competition in Oligopoly," Review of Economic Studies, Oxford University Press, vol. 43(3), pages 493-507.
- Kai A. Konrad & Wolfgang Peters & Karl Wärneryd, 2004.
"Delegation in first-price all-pay auctions,"
Managerial and Decision Economics,
John Wiley & Sons, Ltd., vol. 25(5), pages 283-290.
- Konrad, Kai A. & Peters, Wolfgang & Wärneryd, Karl, 1999. "Delegation in first-price all-pay auctions," SSE/EFI Working Paper Series in Economics and Finance 316, Stockholm School of Economics.
- Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-147, Supplemen.
- Bagwell, Kyle, 1995.
"Commitment and observability in games,"
Games and Economic Behavior,
Elsevier, vol. 8(2), pages 271-280.
- John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
- Fershtman, C. & Kalai, E., 1993.
10-93, Tel Aviv - the Sackler Institute of Economic Studies.
- Gil S. Epstein & Carsten Hefeker, 2003. "Lobbying contests with alternative instruments," Economics of Governance, Springer, vol. 4(1), pages 81-89, 04.
- Fershtman, Chaim, 1985. "Managerial incentives as a strategic variable in duopolistic environment," International Journal of Industrial Organization, Elsevier, vol. 3(2), pages 245-253, June.
- Kyung Hwan Baik, 1994. "Winner-Help-Loser Group Formation In Rent-Seeking Contests," Economics and Politics, Wiley Blackwell, vol. 6(2), pages 147-162, 07.
When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:25:y:2004:i:3:p:147-156. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.