Delegation and firms' ability to collude: a comment

Open Access
Authors
Publication date 2011
Series Amsterdam Center for Law & Economics working paper, 2011-02
Number of pages 6
Publisher Amsterdam: Amsterdam Center for Law & Economics
Organisations
  • Interfacultary Research - Amsterdam Center for Law & Economics (ACLE)
  • Faculty of Economics and Business (FEB) - Amsterdam Business School Research Institute (ABS-RI)
Abstract Lambertini and Trombetta (2002) extend Vickers’ (1985) Cournot model of strategic delegation to an infinitely repeated setting and conclude that delegation does not affect cartel stability if managers collude. This result rests on the assumption that managers are rational, but owners are not. This note shows that if owners behave fully rational, then delegation improves cartel stability if managers collude.
Document type Working paper
Note December 2010
Language English
Published at http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1742738_code503951.pdf?abstractid=1742738&mirid=1
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