Departmental Bulletin Paper AMBIGUITY BETWEEN PIRATE INCENTIVE AND COLLECTIVE DESIRABILITY WITHIN SEMI-DELEGATION PATTERN

ZHAO, KAI  ,  WU, WANSHU

56 ( 2 )  , pp.259 - 279 , 2015-12 , Hitotsubashi University
ISSN:0018-280x
NCID:AA00207547
Description
This paper extends the literature on strategic delegation to a model with a semi-delegation structure. We investigate how the level of spillovers and the degree of product differentiation affect the owner's decision. It is found that owners face a prisoner's dilemma when the spillover is very small or when the products are sufficiently differentiated. Concerning behavior, managers act less aggressively in the pure market, where there are delegated-firms, than in the mixed market, where entrepreneurial and managerial firms co-exist. Furthermore, we highlight the existence of ambiguous areas where delegations make firms profitable, but unable to generate desirable welfare.
Full-Text

http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/27598/1/HJeco0560202590.pdf

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