Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/159854 
Year of Publication: 
2015
Series/Report no.: 
Quaderni - Working Paper DSE No. 1016
Publisher: 
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna
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: 
cc-by-nc Logo
Document Type: 
Working Paper

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