{"title":"On the (Non) Existence of a Price Equilibrium in Delegation Games with Relative Performance Compensation","authors":"M. Kopel, L. Lambertini","doi":"10.2139/ssrn.1988115","DOIUrl":null,"url":null,"abstract":"We show that Miller and Pazgal.s (2001) model of strategic delegation, in which managerial incentives are based upon relative performance, is affected by a non-existence problem which has impact on the price equilibrium. The undercutting incentives generating this result are indeed similar to those affecting the stability of price cartels.","PeriodicalId":320672,"journal":{"name":"ERN: Other Microeconomics: Information","volume":"7 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2012-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Other Microeconomics: Information","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.1988115","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 3
Abstract
We show that Miller and Pazgal.s (2001) model of strategic delegation, in which managerial incentives are based upon relative performance, is affected by a non-existence problem which has impact on the price equilibrium. The undercutting incentives generating this result are indeed similar to those affecting the stability of price cartels.
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