We derive Bertrand and Cournot equilibria in a differentiated duopoly in which each firm hires a manager to undertake research and development (R&D) and production decisions. We show that manager overconfidence and over-investment occur in each market competition. Furthermore, the Cournot game...

We examine whether owners' decisions to delegate responsibilities to overconfident managers improve welfare. We develop a duopoly model with product differentiation, where firms compete in research and development (R&D) and output . Before firms compete, each owner makes a strategic decision...

We consider a game between several principals and a common agent, where principals know only a subset of the agent's available actions. Principals demand robustness and evaluate contracts on a worst-case basis. This robust approach allows for a crisp characterization of the equilibrium contracts...

Aguiar et al. (2018) propose the Shapley distance as a measure of the extent to which output sharing among the stakeholders of an organization can be considered unfair. It measures the distance between an arbitrary pay profile and the Shapley pay profile under a given technology, the latter...

The unique properties of the Shapley value-efficiency, equal treatment of identical input factors, and marginality{have made it an appealing solution concept in various classes of problems. It is however recognized that the pay schemes utilized in many real-life situations generally depart from...