Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159218
Authors: 
Lambertini, Luca
Primavera, Gabriele
Year of Publication: 
2000
Series/Report no.: 
Quaderni - Working Paper DSE 377
Abstract: 
We describe a duopoly model where stockholders assess the relative profitability of delegation versus process innovation. Delegation may not be a dominant strategy. When it is, the game is not necessarily a prisoners' dilemma. Our model yields several equilibria where at least one firm remains entrepreneurial and finds it preferable to undertake cost-reducing R&D activities. Then, we introduce the possibility of using delegation and cost-reducing R&D jointly. The use of R&D investment by entrepreneurial firms is a dominated strategy, so that firms always separate ownership from control, while they don't necessarily combine delegation with process innovation.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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