Stackelberg equilibrium in oligopoly
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This paper shows that in a model of managerial delegation in □ duopoly, if an owner’s decision to hire a manager is modeled explicitly, then the subgame perfect equilibrium may coincide with the Stackelberg solution. Interestingly, this can happen even when the cost of hiring a manager is the same for the owner of each firm.
Oligopoly; Managerial incentive; Stackelberg solution; Principal-agent