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

  • Rtischev, Dimitry

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.

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File URL: https://mpra.ub.uni-muenchen.de/40891/1/MPRA_paper_40891.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40891.

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Date of creation: 01 Jul 2012
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Publication status: Published in Gakushuin Economic Papers 2.49(2012): pp. 133-142
Handle: RePEc:pra:mprapa:40891
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  1. Gehrig, Thomas & Guth, Werner & Levinsky, Rene, 2004. "The commitment effect in belief evolution," Economics Letters, Elsevier, vol. 85(2), pages 163-166, November.
  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. 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.
  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.
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