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Cournot–Bertrand comparisons under double managerial delegation contracts with sales and environmental incentives

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  • Lili Xu
  • Sang‐Ho Lee

Abstract

This study investigates the effect of consumers' willingness to pay (WTP) for green products on double managerial delegation contracts with sales and environmental incentives. We illustrate that Cournot firms set higher sales and lower environmental incentives than Bertrand firms, yielding higher profits and better environmental performance under Cournot. We also examine an endogenous competition mode and discover that Cournot is an equilibrium when consumers' WTP is low, while the welfare‐inferior Bertrand appears unless consumers' WTP or product substitutability is high. Our finding suggests that antitrust authorities should monitor welfare‐distorting coordination when firms reformulate their strategies for emission‐reduction activities under double managerial delegation contracts.

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  • Lili Xu & Sang‐Ho Lee, 2023. "Cournot–Bertrand comparisons under double managerial delegation contracts with sales and environmental incentives," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3409-3421, September.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:6:p:3409-3421
    DOI: 10.1002/mde.3887
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    Cited by:

    1. Sumi Cho & Sang‐Ho Lee, 2024. "Cross ownership and environmental corporate social responsibility with environmental cooperation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(1), pages 446-468, January.
    2. Ohnishi, Kazuhiro, 2025. "Unilateral decisions to hire managers in a mixed duopoly with a foreign labour-managed competitor," MPRA Paper 123875, University Library of Munich, Germany.
    3. Domenico Buccella & Luciano Fanti & Luca Gori & Mauro Sodini, 2024. "The abatement game in a dynamic oligopoly: social welfare versus profits," Annals of Operations Research, Springer, vol. 337(3), pages 1037-1065, June.

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