On the (non) existence of a price equilibrium in delegation games with relative performance compensation

Kopel, Michael; Lambertini, Luca

doi:doi:10.6092/unibo/amsacta/4211

Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/159646

Title:

On the (non) existence of a price equilibrium in delegation games with relative performance compensation

Authors:

Kopel, Michael
Lambertini, Luca

Year of Publication:

2012

Series/Report no.:

Quaderni - Working Paper DSE No. 807

Publisher:

Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna

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.

JEL:

C73
L13

Persistent Identifier of the first edition:

doi:10.6092/unibo/amsacta/4211

Creative Commons License: