This paper explores the idea of using artificial adaptive agents in economic theory. In particular, we use Genetic Algorithms (GAs) to model the learning behavior of a population of adaptive and boundedly rational agents interacting in an economic system. We analyze the behavior of a GA in two...

We introduce a mixed quantity-setting duopoly with a socially concerned firm and a profit-maximizing firm to derive a firms' optimal combination of the organization's type, the structure of managerial compensation and its manager's type. Both firms delegate the quantity choice to managers who...

We study how managerial bargaining power affects outcomes and payoffs in a Hotelling-type duopoly framework with restricted and unrestricted locations. We show that bargaining power only affects the distribution of the surplus between owners and managers, but does not affect the locations,...

We show that Miller and Pazgal's (2001) model of strategic delegation, in which managerial incentives are based upon relative performance, is affected by a non-existence problem which has impact on the price equilibrium. The undercutting incentives generating this result are indeed similar to...

We identify a mistake in the specification of the demand system used in the strategic delegation model based on market shares by Jansen et al. (2007), whereby the price remains above marginal cost when goods are homogeneous. After amending this aspect, we perform a profit comparison with the...

This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to implement a product innovation. Production capacities of both firms are...

We study how inter-firm social comparison can alter the choice of two competing manufacturers between vertical integration and vertical separation if retailers are status-concerned. Status is determined by the difference in retailers’ market shares. The novelty of our approach is that in line...

In this paper we are studying the question under which circumstances a firm with a first-mover advantage may get leapfrogged by a follower. At the market stage we assume a Stackelberg structure, i.e. the leader commits to a quantity and the follower then reacts to it. It is well-known that the...

We consider a quantity-setting duopoly model with both firms having the possibility to produce a homogeneous product. Firm 1 has the option to carry out a product innovation project in two stages and in between the two stages Firm 2 can invest in cost-reducing process innovation. Hence, Firm 1's...

This paper considers a strategic delegation setting with R&D spillovers in a Cournot market. The game we analyze has four stages. First, owners have the option to hire a manager. If they decide to delegate, then in the contracting stage they have to determine the optimal incentives for the...