Publication: Delegation and firms’ ability to collude
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2002-04
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Elsevier
Abstract
In amodel of repeated Cournot competition under complete information, we showthat delegation has no effect on cartel stability if managers collude, while it may hinder cartel stability when owners collude in setting the incentive schemes. If owners can choose whether to delegate or keep control of their respective firms, and both groups of individuals collude or play non-cooperatively in their respective variables according to the level of intertemporal discount factor, then if managers are not able to collude in output levels, owners’ delegation decision is non-monotone in the discount factor.
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Keywords
Delegation, Cartel stability
Bibliographic citation
Journal of Economic Behavior & Organization, abril 2002, 47, 4, p. 359-373