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C. Fershtman, “Managerial Incentives as a Strategic Variable in Duopolistic Environment,” International Journal of Industrial Organization, Vol. 3, No. 2, 1985, pp. 245-253. doi:10.1016/0167-7187(85)90007-4

has been cited by the following article:

• TITLE: Strategic Delegation in Price Competition

  AUTHORS: Werner Güth, Kerstin Pull, Manfred Stadler

  KEYWORDS: Strategic Delegation; Gency Theory; Evenue Sharing

  JOURNAL NAME: Theoretical Economics Letters, Vol.2 No.4, November 1, 2012

  ABSTRACT: We study price competition in heterogeneous markets where price decisions are delegated to agents. Principals implement a revenue sharing scheme to which agents react by commonly charging a sales price. The results of our model exemplify the importance of both intra- and interfirm interactions of principals and agents in competition. We show that price delegation can increase or decrease the firms’ surplus depending on the heterogeneity of the market and the number of agents employed by the firms.