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Extended Games Played by Managerial Firms

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  • Luca Lambertini

Abstract

The issue of timing is addressed in a game between managerial firms. The choice over timing can be taken either by managers or by entrepreneurs. It is shown that (i) delegation drastically modifies the owners' preferences concerning the distribution of roles, as compared to the setting where firms act as pure profitmaximizers; and (ii) the ability of moving first in the market game entails that, at least observationally, the owner of the leading firm prefers not to delegate. I show that the choice of the timing by managers entails the same profit owners would achieve by specifying the timing in the delegation contract.
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Suggested Citation

  • Luca Lambertini, 2000. "Extended Games Played by Managerial Firms," The Japanese Economic Review, Japanese Economic Association, vol. 51(2), pages 274-283, June.
    • Handle: RePEc:bla:jecrev:v:51:y:2000:i:2:p:274-283
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    File URL: http://hdl.handle.net/10.1111/1468-5876.00152
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    1. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    2. Toshihiro Matsumura, 1995. "Endogenous Timing In Multi-Stage Duopoly Games," The Japanese Economic Review, Japanese Economic Association, vol. 46(3), pages 257-265, September.
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    5. Juan Carlos Barcena‐Ruiz & Maria Paz Espinosa, 1996. "Long‐Term or Short‐Term Managerial Incentive Contracts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(3), pages 343-359, September.
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    7. repec:bla:econom:v:49:y:1982:i:193:p:11-20 is not listed on IDEAS
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    Cited by:

    1. Yasuhiko Nakamura, 2019. "Combining the Endogenous Choice of the Timing of Setting the Levels of Strategic Contracts and Their Contents in a Managerial Mixed Duopoly," Journal of Industry, Competition and Trade, Springer, vol. 19(2), pages 235-261, June.
    2. Chen, Ho-Chyuan, 2018. "Entry mode, technology transfer and management delegation of FDI," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 232-243.
    3. Baldini, Massimo & Lambertini, Luca, 2011. "Profit taxation and capital accumulation in a dynamic oligopoly model," Japan and the World Economy, Elsevier, vol. 23(1), pages 13-18, January.
    4. repec:ebl:ecbull:v:12:y:2007:i:27:p:1-7 is not listed on IDEAS
    5. Nakamura, Yasuhiko, 2011. "Bargaining over managerial delegation contracts and merger incentives in an international oligopoly," Research in Economics, Elsevier, vol. 65(1), pages 47-61, March.
    6. Kangsik Choi & DongJoon Lee, 2022. "Network externalities and endogenous timing in managerial firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1462-1475, July.
    7. Luciano Fanti & Marcella Scrimitore, 2017. "The endogeneous choice of delegation in a duopoly with outsourcing to the rival," Discussion Papers 2017/219, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    8. Yasuhiko Nakamura & Tomohiro Inoue, 2007. "Endogenous Timing in a Mixed Duopoly: The Managerial Delegation Case," Economics Bulletin, AccessEcon, vol. 12(27), pages 1-7.
    9. Luciano Fanti & Nicola Meccheri, 2016. "Endogenous timing of managerial contracts in unionised oligopolies," Working Paper series 16-19, Rimini Centre for Economic Analysis.
    10. Luciano Fanti, 2016. "Endogenous timing under price competition and unions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 12(4), pages 401-413, December.
    11. Yasuhiko Nakamura, 2017. "Endogenous market structures in a mixed oligopoly with a public firm whose managerial contract is based on welfare and bargaining over the managerial contract of a private firm," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(2), pages 189-209, August.
    12. Toshihiro Matsumura, 2003. "Stackelberg Mixed Duopoly with a Foreign Competitor," Bulletin of Economic Research, Wiley Blackwell, vol. 55(3), pages 275-287, July.
    13. Nicola Meccheri & Luciano Fanti, 2016. "Should delegation contracts be made before or after union wage setting? Endogenous moves in a managerial-unionized duopoly," Working Paper series 16-18, Rimini Centre for Economic Analysis.
    14. Nakamura, Yasuhiko, 2019. "Combining the endogenous choice of the timing of setting incentive parameters and the contents of strategic contracts in a managerial mixed duopoly," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 207-233.
    15. Lambertini, Luca & Trombetta, Marco, 2002. "Delegation and firms' ability to collude," Journal of Economic Behavior & Organization, Elsevier, vol. 47(4), pages 359-373, April.
    16. Yoshihiro Tomaru & Yasuhiko Nakamura & Masayuki Saito, 2009. "Capacity Choice in a Mixed Duopoly with Managerial Delegation," Economics Bulletin, AccessEcon, vol. 29(3), pages 1904-1924.
    17. Luciano Fanti, 2017. "An Observable Delay Game with Unionised Managerial Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(1), pages 50-69, February.
    18. Yasuhiko Nakamura & Tomohiro Inoue, 2009. "Endogenous timing in a mixed duopoly: price competition with managerial delegation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 325-333.
    19. Jean‐Baptiste Tondji, 2022. "Overconfidence and welfare in a differentiated duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 751-767, April.

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