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Endogenous timing in a mixed duopoly: price competition with managerial delegation

  • Yasuhiko Nakamura

    (Graduate School of Economics, Waseda University, Tokyo, Japan)

  • Tomohiro Inoue

    (Faculty of Political Science and Economics, Waseda University, Tokyo, Japan)

We introduce a managerial delegation contract into the mixed duopoly model and examine its influence on price setting in a mixed duopoly in the context of the endogenous-timing problem. We obtain the result that owners of a public and a private firm prefer to delay the setting of the prices of their products as much as possible. Thus, in equilibrium, the firms choose their prices simultaneously in the latter stage of the game. This is in contrast to the findings of the entrepreneurial case, according to which firms choose prices simultaneously in the former stage. Copyright © 2009 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 30 (2009)
Issue (Month): 5 ()
Pages: 325-333

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Handle: RePEc:wly:mgtdec:v:30:y:2009:i:5:p:325-333
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  1. Miller, Nolan H & Pazgal, Amit I, 2001. "The Equivalence of Price and Quantity Competition with Delegation," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 284-301, Summer.
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  19. Yuanzhu Lu, 2005. "Endogenous Timing in a Mixed Oligopoly with Foreign Competitors: the Linear Demand Case," CEMA Working Papers 506, China Economics and Management Academy, Central University of Finance and Economics.
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