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contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits …, while the second contract gives an additional sales bonus. Although theory predicts the second contract to be chosen, it is … only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the …
Persistent link: https://www.econbiz.de/10009583883
leadership. Our data, however, does not confirm the theory. While Stackelberg equilibria are extremely rare we often observe …
Persistent link: https://www.econbiz.de/10009580476
We report on an experiment designed to compare Stackelberg and Cournot duopoly markets with quantity competition. For each market we implement both a random matching and fixed-pairs version. Stackelberg markets yield, regardless of the matching scheme, higher outputs than Cournot markets. Under...
Persistent link: https://www.econbiz.de/10009580482
Persistent link: https://www.econbiz.de/10001970380