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Aggressiveness of Managers in the Market with Network Effects: The Case of Biased Managers as Strategic Commitment

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  • Yasuhiko Nakamura

Abstract

This paper analyzes a model wherein firms' owners hire biased managers in a differentiated goods duopoly with network effects. We show that whether firms hire an aggressive manager or not depends on both the degree of product differentiation and the strength of network effects in price competition whereas it does not depend on the degree of product differentiation or the strength of network effects in quantity competition. Thus, the attitudes of firms' managers depend on the type of competition and the relative magnitude of the strength of network effects to the degree of product differentiation. Copyright © 2015 John Wiley & Sons, Ltd.

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  • Yasuhiko Nakamura, 2016. "Aggressiveness of Managers in the Market with Network Effects: The Case of Biased Managers as Strategic Commitment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(7), pages 495-506, October.
  • Handle: RePEc:wly:mgtdec:v:37:y:2016:i:7:p:495-506
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    Cited by:

    1. Clemens Buchen & Alberto Palermo, 2020. "A biased firm in a market with complementary products. A note on the welfare effects," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(4), pages 448-453, September.

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