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We investigate the differentiated duopoly and triopoly markets in which firms can choose to strategically delegate when … under duopoly, one firm chooses delegate, while the other firm chooses not to delegate as multiple equilibria. However, in … equilibrium, our results imply that the underconfident (overconfident) manager in the duopoly (triopoly) is more likely to take …
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We analyze optimal labor contracts when the worker is inequity averse towards the employer. Welfare is maximized for an equal sharing rule of surplus between the worker and the firm. That is, profit sharing is optimal even if effort is contractible. If the firm can make a take-it-or leave-it...
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