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Strategic commitment to pursue a goal other than profit in a Cournot duopoly

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  • Rtischev, Dimitry

Abstract

Competition among profit-seeking firms in an oligopolistic industry inherently generates incentives for firms to commit to maximize a performance metric other than profit. We briefly review the underlying theory, analyze its ramifications in a Cournot duopoly, and consider feasibility constraints from the perspective of strategic management.

Suggested Citation

  • Rtischev, Dimitry, 2012. "Strategic commitment to pursue a goal other than profit in a Cournot duopoly," MPRA Paper 40891, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40891
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    File URL: https://mpra.ub.uni-muenchen.de/40891/1/MPRA_paper_40891.pdf
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    References listed on IDEAS

    as
    1. Florian Englmaier, 2011. "Commitment in R&D tournaments via strategic delegation to overoptimistic managers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 32(1), pages 63-69, January.
    2. Heifetz, Aviad & Shannon, Chris & Spiegel, Yossi, 2007. "What to maximize if you must," Journal of Economic Theory, Elsevier, vol. 133(1), pages 31-57, March.
    3. Gehrig, Thomas & Guth, Werner & Levinsky, Rene, 2004. "The commitment effect in belief evolution," Economics Letters, Elsevier, vol. 85(2), pages 163-166, November.
    4. Nolan Miller & Amit Pazgal, 2002. "Relative performance as a strategic commitment mechanism," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(2), pages 51-68.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    oligopolistic competition; strategic commitment; strategic delegation;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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