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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.