Strategic Delegation in Oligopoly

One objective of this chapter is to provide the reader with a clear and intuitive, but yet rigorous, description of the topic of strategic managerial incentives under oligopolistic competition. We further discuss the closely related issues of vertical separation where a manufacturer delegates decision making to a retailer and the delegation of decisions to a certain type of agent. We start the discussion of each of these themes by reflecting on seminal papers that have first introduced the corresponding topic. We present and critically discuss the key assumptions behind each of the basic models and point out important applications along with some empirical and experimental evidence. We also discuss contributions that have provided important extensions to the basic frameworks