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Strategic delegation effects on Cournot and Stackelberg competition

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  • This paper compares the outcomes of two three-stage games of two firms competing for quantity with managerial delegation. In fact, we prove that simultaneous choice of managers by the proprietors of the firms followed by Stackelberg-type competition is equivalent to sequential choice of managers followed by Cournot-type competition. We prove equivalence in a general setting, namely, when the duopolistic model is characterised by a non-linear inverse demand function of the form $p_i = a-(q_i)^n-γ (q_j)^n$, $i,j = 1,2$ and $n∈\mathbb{N}$.

    Mathematics Subject Classification: Primary: 91B38; Secondary: 91B40.


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    [5] G. Stamatopoulos, Cournot and Stakelberg equilibrium under strategic delegation: an equivalence result, Theory and Decision, 81 (2016), 553-570.  doi: 10.1007/s11238-016-9548-x.
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