Chapter 9

Managerial Delegation in an International Mixed Duopoly with Price Competition

Kazuhiro Ohnishi

Abstract

This chapter investigates a mixed duopoly market in which a state-owned public firm competes on price against a foreign private firm. Each firm decides whether or not to hire a manager. The chapter demonstrates that there is a subgame perfect Nash equilibrium in which only the foreign private firm hires a manager. This is in contrast with the case in which the state-owned firm competes against a domestic private firm, where both firms hire managers.

Total Pages: 144-153 (10)

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