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Managerial delegation in a Cournot duopoly with partially cooperating firms

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  • Ohnishi, Kazuhiro

Abstract

This study investigates a quantity-setting duopoly model in which two partially cooperating firms coexist. The following three-stage game is considered. In the first stage, each owner decides whether to hire a manager. In the second stage, the owners who hired managers select incentive parameters for them. In the third stage, the managers or, in their absence, the owners simultaneously and independently choose the firms’ outputs. The study adopts subgame perfection as an equilibrium concept and solves the game by backward induction. The study demonstrates that, in the subgame-perfect equilibrium, both firms hire managers.

Suggested Citation

  • Ohnishi, Kazuhiro, 2026. "Managerial delegation in a Cournot duopoly with partially cooperating firms," MPRA Paper 128718, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:128718
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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