Incentive schemes as strategic variables: an application to a mixed duopoly

Fátima Barros*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

89 Citations (Scopus)

Abstract

In the context of asymmetry of information between firms' owners and their managers, we investigate the use of incentive contracts as strategic variables in a duopoly with a public and a private firm. By giving the public manager an incentive scheme based on a linear combination of profit and sales revenue, we show that welfare can be improved. Furthermore, we show that the government should not privatize the public company.
Original languageEnglish
Pages (from-to)373-386
Number of pages14
JournalInternational Journal of Industrial Organization
Volume13
Issue number3
DOIs
Publication statusPublished - Sept 1995

Keywords

  • Asymmetric information
  • Mixed oligopoly
  • Strategic contracts

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