Successive duopoly under moral hazard: Will incentive contracts persist?
The central purpose of this paper is to examine the incentive contract as an equilibrium phenomenon. We analyse a model of vertical differentiation in which we deal with the strategic role of the competitor’s decisions in a successive duopoly. Is it better for a processor to offer an incentive co...
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OmniaScience
2018
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oai:localhost:DHQB_123456789-37322018-10-22T08:42:44Z Successive duopoly under moral hazard: Will incentive contracts persist? Olmos, Marta Fernández Martínez, Jorge Rosell Escuer, Manuel Antonio Espitia Vinuesa, Luz María Marín Social Sciences moral hazard successive duopoly equilibrium The central purpose of this paper is to examine the incentive contract as an equilibrium phenomenon. We analyse a model of vertical differentiation in which we deal with the strategic role of the competitor’s decisions in a successive duopoly. Is it better for a processor to offer an incentive contract to an upstream producer or the spot market? We determine the equilibrium of a game in which the processors simultaneously decide whether to offer an incentive contract or to continue at the spot market to acquire their input. Our results show that under successive duopoly, offering an incentive contract constitutes the unique equilibrium solution, which highlights the incentive contract persistence 2018-07-26T09:21:26Z 2018-07-26T09:21:26Z 2009 http://lrc.quangbinhuni.edu.vn:8181/dspace/handle/DHQB_123456789/3732 OmniaScience |
| institution |
Trung tâm Học liệu Đại học Quảng Bình (Dspace) |
| collection |
Trung tâm Học liệu Đại học Quảng Bình (Dspace) |
| topic |
Social Sciences moral hazard successive duopoly equilibrium |
| spellingShingle |
Social Sciences moral hazard successive duopoly equilibrium Olmos, Marta Fernández Martínez, Jorge Rosell Escuer, Manuel Antonio Espitia Vinuesa, Luz María Marín Successive duopoly under moral hazard: Will incentive contracts persist? |
| description |
The central purpose of this paper is to examine the incentive contract as an
equilibrium phenomenon. We analyse a model of vertical differentiation in which we deal
with the strategic role of the competitor’s decisions in a successive duopoly. Is it better for
a processor to offer an incentive contract to an upstream producer or the spot market? We
determine the equilibrium of a game in which the processors simultaneously decide
whether to offer an incentive contract or to continue at the spot market to acquire their
input. Our results show that under successive duopoly, offering an incentive contract
constitutes the unique equilibrium solution, which highlights the incentive contract
persistence |
| author |
Olmos, Marta Fernández Martínez, Jorge Rosell Escuer, Manuel Antonio Espitia Vinuesa, Luz María Marín |
| author_facet |
Olmos, Marta Fernández Martínez, Jorge Rosell Escuer, Manuel Antonio Espitia Vinuesa, Luz María Marín |
| author_sort |
Olmos, Marta Fernández |
| title |
Successive duopoly under moral hazard: Will incentive contracts persist? |
| title_short |
Successive duopoly under moral hazard: Will incentive contracts persist? |
| title_full |
Successive duopoly under moral hazard: Will incentive contracts persist? |
| title_fullStr |
Successive duopoly under moral hazard: Will incentive contracts persist? |
| title_full_unstemmed |
Successive duopoly under moral hazard: Will incentive contracts persist? |
| title_sort |
successive duopoly under moral hazard: will incentive contracts persist? |
| publisher |
OmniaScience |
| publishDate |
2018 |
| url |
http://lrc.quangbinhuni.edu.vn:8181/dspace/handle/DHQB_123456789/3732 |
| _version_ |
1717292440530976768 |
| score |
9,463379 |