Stackelberg leadership and managerial delegation under hyperbolic demand

C-Tier
Journal: Economics Letters
Year: 2023
Volume: 224
Issue: C

Authors (2)

Score contribution per author:

0.505 = (α=2.02 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We revisit the traditional Stackelberg model considering a hyperbolic demand function. We show that, in duopoly, there exists no incentive to acquire leadership or to separate ownership and control by hiring a manager. The reason is that best replies are orthogonal in a complete neighbourhood of the Nash equilibrium. The unilateral incentive either to lead or to hire a manager is restored if the industry is at least triopolistic. This holds irrespective of the specific delegation contract being adopted.

Technical Details

RePEc Handle
repec:eee:ecolet:v:224:y:2023:i:c:s0165176523000319
Journal Field
General
Author Count
2
Added to Database
2026-01-25