Strategic delegation in a Stackelberg game with multiple stages

DOI10.1142/S0219198911003039MaRDI QIDQ3166240zbMATH OpenFDO

Authors Paraskevas V. Lekeas, Giorgos Stamatopoulos

Publication date 10 October 2012

Published in International Game Theory Review (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1107.3198

zbMATH Keywords

delegationlate-movers' advantagesequential competition

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26) (n)-person games, (n>2) (91A06)

Abstract: We analyze strategic delegation in a Stackelberg model with an arbitrary number, n, of firms. We show that the n-1 last movers delegate their production decisions to managers whereas the first mover does not. Equilibrium incentive rates are increasing in the order with which managers select quantities. Letting u_i^* denote the equilibrium payoff of the firm whose manager moves in the i-th place, we show that u_n^*>u_{n-1}^*>...>u_2^*>u_1^*. We also compare the delegation outcome of our game with that of a Cournot oligopoly and show that the late (early) moving firms choose higher (lower) incentive rates than the Cournot firms.

Recommendations

• Strategic delegation effects on Cournot and Stackelberg competition
• Stackelberg equilibria in managerial delegation games
• Strategic delegation under cost asymmetry
• Cournot and Stackelberg equilibrium under strategic delegation: an equivalence result
• Strategic delegation in oligopolistic tournaments

Cites work

• Commitment and observability in games
• Commitment, first-mover-, and second-mover advantage
• First Mover Disadvantages with Private Information
• First Mover and Second Mover Advantages
• Games with imperfectly observable commitment
• Imperfectly observable commitments in \(n\)-player games
• Perfect competition as the limit of a hierarchical market game
• The value of commitment in Stackelberg games with observation costs
• Unobserved Delegation

Cited in

(8)

• Stackelberg leadership and managerial delegation under hyperbolic demand
• A note on endogenous timing with strategic delegation: unilateral externality case
• Stackelberg equilibria in managerial delegation games
• Cournot and Stackelberg equilibrium under strategic delegation: an equivalence result
• Strategic delegation under cost asymmetry
• Contractual delay and efficiency in delegation games. Two-principal case
• On Delegation in Contests and the Survival of Payoff Maximizing Behavior
• Global dynamics of an oligopoly game model with nonlinear costs and strategic delegation

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