Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257604 
Year of Publication: 
2022
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 13 [Issue:] 2 [Article No.:] 28 [Publisher:] MDPI [Place:] Basel [Year:] 2022 [Pages:] 1-23
Publisher: 
MDPI, Basel
Abstract: 
We investigate why a firm might purposefully hire a chief executive officer (CEO) who under- or over-estimates the degree of substitutability between competing products. This counterintuitive result arises in imperfect competition because CEO bias can affect rival behavior and the intensity of competition. We lay out the conditions under which it is profitable for owners to hire biased managers. Our work shows that a universal policy that effectively eliminates such biases need not improve social welfare.
Subjects: 
behavioral economics
Bertrand model
Cournot model
Cournot-Bertrand model
firm objectives
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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