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Asymmetric Choice of Relative‐Performance Delegation Under Duopoly Competition With Vertical Product‐Quality Difference
Author(s) -
Chen ShihShen,
Hsu ChuChuan,
Ko PoSheng
Publication year - 2025
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4512
Subject(s) - duopoly , delegation , competition (biology) , quality (philosophy) , product (mathematics) , microeconomics , product differentiation , economics , industrial organization , business , mathematics , cournot competition , management , ecology , philosophy , geometry , epistemology , biology
ABSTRACT In this paper, we reexamine the optimal weights on relative performance delegation under price and quantity competition modes with double product differentiation (horizontal product differentiation and vertical product‐quality differentiation) pinpointing the strategic asymmetric choice of delegation due to vertical product‐quality differentiation. Because the consumers are willing to pay more for higher quality products and for the firm to maintain its reputation, the firm may limit its supply of product without having aggressive selling effort.