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Endogenous timing in a mixed duopoly: price competition with managerial delegation
Author(s) -
Nakamura Yasuhiko,
Inoue Tomohiro
Publication year - 2009
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.1455
Subject(s) - duopoly , delegation , microeconomics , competition (biology) , context (archaeology) , economics , price setting , order (exchange) , bertrand competition , cournot competition , industrial organization , oligopoly , management , ecology , paleontology , finance , biology
We introduce a managerial delegation contract into the mixed duopoly model and examine its influence on price setting in a mixed duopoly in the context of the endogenous‐timing problem. We obtain the result that owners of a public and a private firm prefer to delay the setting of the prices of their products as much as possible. Thus, in equilibrium, the firms choose their prices simultaneously in the latter stage of the game. This is in contrast to the findings of the entrepreneurial case, according to which firms choose prices simultaneously in the former stage. Copyright © 2009 John Wiley & Sons, Ltd.