On the (non) existence of a price equilibrium in delegation games with relative performance compensation

We show that Miller and Pazgal.s (2001) model of strategic delegation, in which managerial incentives are based upon relative performance, is affected by a non-existence problem which has impact on the price equilibrium. The undercutting incentives generating this result are indeed similar to those affecting the stability of price cartels.

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Year of publication:	2012-01
Authors:	Kopel, M. ; Lambertini, L.
Institutions:	Dipartimento di Scienze Economiche, Alma Mater Studiorum - Università di Bologna

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	C73 - Stochastic and Dynamic Games ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009415658