Production-location decision under duopoly with managerial incentives

Endogenous managerial incentive contract

Endogenous managerial incentive contracts in a differentiated duopoly, with and without commitment

✍ Constantine Manasakis; Evangelos Mitrokostas; Emmanuel Petrakis 📂 Article 📅 2010 🏛 John Wiley and Sons 🌐 English ⚖ 180 KB

In a differentiated Cournot duopoly, we examine the contracts that firms' owners use to compensate their managers and the resulting output levels, profits and social welfare. If products are either sufficiently differentiated or sufficiently close substitutes, owners use Relative Performance contrac