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Bargaining over Managerial Contracts in Delegation Games: The Generalized Oligopolistic Case
Author(s) -
Nakamura Yasuhiko
Publication year - 2012
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.2546
Subject(s) - delegation , negotiation , oligopoly , microeconomics , profit (economics) , shareholder , business , industrial organization , compensation (psychology) , profit sharing , economics , cournot competition , corporate governance , finance , management , psychology , political science , psychoanalysis , law
The main purpose of this paper is to disclose the properties of the equilibrium outcomes in the differentiated‐products model with two stages: (i) owner‐shareholders negotiate managerial compensation with their managers that comprises their profits and sales (sales delegation) and (ii) they engage in their market competition. The other purpose of this paper is to study the differentiated goods model in which an owner bargains the managerial compensation with her/his manager that comprises her/his profit and her/his rival's profit (relative performance delegation). We further investigate the situation wherein the firm with sales delegation and the firm with the relative performance delegation coexist. Copyright © 2012 John Wiley & Sons, Ltd.

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