Should Owners of Firms Delegate Long-run Decisions?
This paper analyzes whether owners of firms have incentives to delegate their long-run decisions to managers or not. The result arising from our analysis shows that owners do have incentives to keep their long-run decisions (the location of the firm) to themselves. In this context we show that the delegation of short-run decisions (prices) to the managers leads to an increase in the degree of product differentiation with regard to the case in which firms do not hire managers.
|Date of creation:||Nov 1999|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 34 94 601 3740
Fax: + 34 94 601 4935
Web page: http://www.ea3.ehu.es
More information through EDIRC
|Order Information:|| Postal: Dpto. de Econometría y Estadística, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain|
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.:
- Michael L. Katz., 1991.
"Game-Playing Agents: Unobservable Contracts as Precommitments,"
Economics Working Papers
91-172, University of California at Berkeley.
- Michael L. Katz, 1991. "Game-Playing Agents: Unobservable Contracts as Precommitments," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 307-328, Autumn.
- Katz, Michael L., 1991. "Game-Playing Agents: Unobservable Contracts as Precommitments," Department of Economics, Working Paper Series qt79b870w0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- d'ASPREMONT, Claude & GABSZEWICZ, Jean J. & THISSE,Â Jacques-FranÃ§ois, .
"On Hotelling's "Stability in competition","
CORE Discussion Papers RP
385, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ramon Fauli-Oller & Massimo Motta, 1996.
"Managerial Incentives for Takeovers,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 5(4), pages 497-514, December.
- Tabuchi, T. & Thisse, J.-F., .
"Asymetric equilibria in spatial competition,"
CORE Discussion Papers RP
1151, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Szymanski, Stefan, 1994. "Strategic delegation with endogenous costs : A duopoly with wage bargaining," International Journal of Industrial Organization, Elsevier, vol. 12(1), pages 105-116, March.
- Oliver D. Hart, 1983. "The Market Mechanism as an Incentive Scheme," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 366-382, Autumn.
- Steven D. Sklivas, 1987. "The Strategic Choice of Managerial Incentives," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 452-458, Autumn.
- Carlos Barcena-Ruiz, Juan & Paz Espinosa, Maria, 1999. "Should multiproduct firms provide divisional or corporate incentives?," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 751-764, July.
- F. Javier Casado-Izaga, 2000. "Location decisions: The role of uncertainty about consumer tastes," Journal of Economics, Springer, vol. 71(1), pages 31-46, February.
- David Scharfstein, 1988. "Product-Market Competition and Managerial Slack," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 147-155, Spring.
- Chaim Fershtman & Kenneth L Judd, 1984.
"Equilibrium Incentives in Oligopoly,"
642, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Juan Carlos Barcena-Ruiz & Maria Paz Espinosa, 1996. "Long-Term or Short-Term Managerial Incentive Contracts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(3), pages 343-359, 09.
When requesting a correction, please mention this item's handle: RePEc:ehu:biltok:199911. 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: (Alcira Macías)
If references are entirely missing, you can add them using this form.