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

Fátima Barros

doi:10.1016/0167-7187(94)00461-A

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

Fátima Barros^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

92 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 language	English
Pages (from-to)	373-386
Number of pages	14
Journal	International Journal of Industrial Organization
Volume	13
Issue number	3
DOIs	https://doi.org/10.1016/0167-7187(94)00461-A
Publication status	Published - Sept 1995

Keywords

Asymmetric information
Mixed oligopoly
Strategic contracts

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10.1016/0167-7187(94)00461-A

Cite this

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title = "Incentive schemes as strategic variables: an application to a mixed duopoly",

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.",

keywords = "Asymmetric information, Mixed oligopoly, Strategic contracts",

author = "F{\'a}tima Barros",

note = "Funding Information: I wish to thank JacquesC r6mer,M assimoM otta,J acquesT hisse,Joseph E. Harringtona s editor and two refereesfo r their helpfuls uggestionosn an earlier version of this paper. The usual caveata pplies.Financial support from the EEC Commission(S .P.E.S.)is gratefullya cknowledged,",

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PY - 1995/9

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N2 - 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.

AB - 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.

KW - Asymmetric information

KW - Mixed oligopoly

KW - Strategic contracts

UR - https://www.scopus.com/pages/publications/21844504496

U2 - 10.1016/0167-7187(94)00461-A

DO - 10.1016/0167-7187(94)00461-A

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SP - 373

EP - 386

JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

IS - 3

ER -

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

Abstract

Keywords

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