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additional stage to the game, the accounting stage, it becomes clear that the incentives are inverse to those in Ronen and … they indicate the true information in the accounting stage. If they choose to report untruthfully then they suffer a loss …
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This paper considers a two-stage game with two owners and two managers. On the first stage, the owners choose a linear combination of profits and sales as incentives for their managers. On the second stage, the two managers compete in a tournament against each other. In a symmetric equilibrium,...
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