Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159854
Authors: 
Delbono, Flavio
Lambertini, Luca
Marattin, Luigi
Year of Publication: 
2015
Series/Report no.: 
Quaderni - Working Paper DSE 1016
Abstract: 
We revisit the two-stage duopoly game with strategic delegation and asymmetric technologies of Sen and Stamatopoulos (2015). We show that their conclusions are misled by the restrictive assumption that the extent of delegation to managers is restricted to a binary set. Allowing for a continuous set of delegation incentives, we prove that the delegation stage is a prisoners dilemma, the unique subgame perfect equilibrium entailing both firms hiring managers. At equilibrium, the more efficient firm makes higher profits.
JEL: 
D43
L13
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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