A common assumption in the literature on the double marginalization problem is that the retailer can set his mark-up only in the second stage of the game after the producer has moved. To the extent that the sequence of moves is designed to reflect the relative bargaining power of the two parties...

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We study managerial compensation schemes for situations, where the current management knows more about the company's expected profitability than the new employee. When a manager is offered a contract with only a low fixed salary but a high profit participation, he is afraid that the company's...

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