Bargaining over managerial delegation contracts and merger incentives in an international oligopoly

Nakamura, Yasuhiko

doi:10.1016/j.rie.2010.04.002

Cited by 6 publications

(25 citation statements)

References 39 publications

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“…The owner of firm i can evaluate the performance of its manager on the basis of two easy indicators: profit π i and q i , ( i = 0, 1). Then, similar to Lambertini (), Lambertini (), Nakamura (), and Nakamura (), the owner of firm i provides the manager with the type of managerial delegation contract V i ( π i , q i ) = π i + γ i q i = ( p i + γ i ) q i , ( i = 0, 1). The manager of firm i can maximize its payoff by setting the value q i or price p i , which maximizes V i ( π i , q i ), ( i = 0, 1) ∪ (0, 1) .…”

Section: Modelmentioning

confidence: 98%

“…Finally, analogous to Van Witteloostuijn et al (), Nakamura (), and Nakamura (), we assume that the managers of firms 0 and 1 have the same bargaining power. The disagreement point of both the owner and the manager is zero.…”

Section: Modelmentioning

confidence: 99%

“…In this paper, we focus on the bargaining over the content of the managerial delegation contract between the owner and manager that occurs within each firm, taking into account the economic situation in which the disclosure of managerial delegation contracts is prescribed in modern corporate governance clauses to protect shareholders' interests. Following Lambertini (), Lambertini (), Nakamura (), and Nakamura (), we adopt the partial‐shift type of sales delegation contract à la Fershtman and Judd (), Sklivas (), and Vickers (), which is equal to the weighted sum of each firm's profit and sales.…”

Section: Introductionmentioning

confidence: 99%

“…This can be supported by the assumption that the payoff to the manager of firm i is defined as λ i + μ i V i for some real number λ i and some positive real number μ i . Moreover, this type of delegation contract has been used by (Lambertini, ; Lambertini, ; Lambertini & Trombetta, ; Nakamura, ), and (Nakamura, ).…”

mentioning

confidence: 99%

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Price versus Quantity in a Duopolistic Market with Bargaining over Managerial Delegation Contracts

Nakamura

2015

Manage Decis Econ

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This paper studies the endogenous choices of strategic contracts in a duopoly with bargaining between the owner and manager of each firm over the content of the managerial delegation contract. We show that when the bargaining power of the manager relative to that of the owner within each firm is sufficiently high, quantity competition based on the quantity contracts chosen by the owners of both firms can be uniquely observed in the equilibrium, whereas quantity competition and price competition can be observed in the equilibrium when this relative bargaining power is sufficiently low. Copyright © 2015 John Wiley & Sons, Ltd.

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Section: Modelmentioning

confidence: 98%

Section: Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

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Price versus Quantity in a Duopolistic Market with Bargaining over Managerial Delegation Contracts

Nakamura

2015

Manage Decis Econ

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“…The bargaining agenda in the works of Witteloostuijn et al (2007), Nakamura (2008aNakamura ( , 2008bNakamura ( , 2011 and Kamaga & Nakamura (2008) includes only the incentive rates a i , i = 1, 2. The terms t i and λ i , i = 1, 2, are not included in the agenda or even in the Nash product.…”

Section: Propositionmentioning

confidence: 99%

Bargaining Over Managerial Contracts: A Note

Stamatopoulos

2018

SSRN Journal

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The theory of strategic managerial delegation has recently been extended by incorporating bargaining over managerial contracts (van Witteloostuijn et.al 2007, etc). Assuming that bargaining involves only the incentive rates of managers, this line of research has shown that market outcomes (profits and social welfare) depend crucially on the intra-firm allocation of bargaining powers. In the current paper we revisit the bargaining framework assuming that negotiations involve all contractual terms (incentive rates and transfers). We show that contrary to the earlier results, the market equilibrium is independent of bargaining powers, the latter determining only the transfers. Hence the outcome of our model is identical to the outcome of the delegation model with no bargaining.

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Merger incentives in an international oligopoly composed of Kantian optimization firms with differentiated goods

Nakamura

2023

Manage Decis Econ

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This paper revisits horizontal mergers in an international oligopoly with differentiated goods under the segmented market assumption. In particular, we focus on an industry composed of firms that engage in their Kantian optimization. Strikingly from the case of each firm's Nashian optimization, we show that a duopoly with two international mergers can be uniquely observed in equilibrium except for a full monopoly, and the highest total social welfare can be achieved in its equilibrium market structure. In addition, we consider the managerial delegation cases from the viewpoints of two types of each firm's Kantian optimization.

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Bargaining over managerial delegation contracts and merger incentives in an international oligopoly

Cited by 6 publications

References 39 publications

Price versus Quantity in a Duopolistic Market with Bargaining over Managerial Delegation Contracts

Price versus Quantity in a Duopolistic Market with Bargaining over Managerial Delegation Contracts

Bargaining Over Managerial Contracts: A Note

Merger incentives in an international oligopoly composed of Kantian optimization firms with differentiated goods

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