Spatial competition and the duration of managerial incentive contracts
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| Format: | Artículo científico |
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Fundación SEPI
2005
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| author | F. Javier Casado-Izaga |
| author_facet | F. Javier Casado-Izaga |
| contents | Spatial competition and the duration of managerial incentive contracts F. Javier Casado-Izaga Juan Carlos Bárcena-Ruiz Economía y Finanzas strategic delegation Managerial incentives product differentiation We consider a duopoly model of spatial competition in which the owners ofthe firms can strategically use two variables: the duration of managerial incentivecontracts and the location of the firms. In equilibrium, one ownerchooses a long-term incentive contract for his manager (becoming a leaderin incentives), while the other (the follower) chooses short-term contracts.Both firms are located outside the city boundaries, but the leader locates itsfirm closer to the market than the follower and encourages its manager to beless aggressive than the followers manager. As a result, in contrast to theconventional wisdom, under Bertrand competition the leader obtains higherprofits than the follower. 2005 artículo científico 0210-1521 https://www.redalyc.org/articulo.oa?id=17329204 en http://www.redalyc.org/revista.oa?id=173 Investigaciones Económicas application/pdf Fundación SEPI Investigaciones Económicas (España) Num.2 Vol.XXIX |
| format | Artículo científico |
| id | redalyc_17329204 |
| institution | Redalyc |
| language | en |
| publishDate | 2005 |
| publisher | Fundación SEPI |
| spellingShingle | Spatial competition and the duration of managerial incentive contracts F. Javier Casado-Izaga Economía y Finanzas strategic delegation Managerial incentives product differentiation Spatial competition and the duration of managerial incentive contracts F. Javier Casado-Izaga Juan Carlos Bárcena-Ruiz Economía y Finanzas strategic delegation Managerial incentives product differentiation We consider a duopoly model of spatial competition in which the owners ofthe firms can strategically use two variables: the duration of managerial incentivecontracts and the location of the firms. In equilibrium, one ownerchooses a long-term incentive contract for his manager (becoming a leaderin incentives), while the other (the follower) chooses short-term contracts.Both firms are located outside the city boundaries, but the leader locates itsfirm closer to the market than the follower and encourages its manager to beless aggressive than the followers manager. As a result, in contrast to theconventional wisdom, under Bertrand competition the leader obtains higherprofits than the follower. 2005 artículo científico 0210-1521 https://www.redalyc.org/articulo.oa?id=17329204 en http://www.redalyc.org/revista.oa?id=173 Investigaciones Económicas application/pdf Fundación SEPI Investigaciones Económicas (España) Num.2 Vol.XXIX |
| title | Spatial competition and the duration of managerial incentive contracts |
| topic | Economía y Finanzas strategic delegation Managerial incentives product differentiation |
| url | https://www.redalyc.org/articulo.oa?id=17329204 |