Bonus Scheme, Managerial Delegation, and Quantity Competition
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Wiley Open Access
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| Natura: | Artículo Open Access |
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Wiley
2025
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| _version_ | 1867021371152793600 |
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| author | Chung‐Hui Chou |
| author_facet | Chung‐Hui Chou Chung‐Hui Chou |
| collection | Wiley Open Access |
| contents | Bonus Scheme, Managerial Delegation, and Quantity Competition Chung‐Hui Chou Managerial and Decision Economics ABSTRACTThis note examines if owners would offer a bonus for each unit of output dependent on both firms' output levels in equilibrium and the impacts on market performances. The main contribution is showing that owners may lessen quantity competition more than the standard Cournot by adopting the relative quantity delegation in which they offer an incentive scheme based on profit plus a bonus for each unit of output that decreases in their own output levels but increases in rivals' ones. Consequently, contrary to conventional wisdom, output delegation increases profitability but reduces consumers' surplus. 10.1002/mde.4476 http://onlinelibrary.wiley.com/termsAndConditions#vor |
| doi_str_mv | 10.1002/mde.4476 |
| format | Artículo Open Access |
| id | wiley_oa_10_1002_mde_4476 |
| institution | Wiley Open Access |
| license_str_mv | http://onlinelibrary.wiley.com/termsAndConditions#vor |
| publishDate | 2025 |
| publisher | Wiley |
| record_format | wiley_oa |
| spellingShingle | Bonus Scheme, Managerial Delegation, and Quantity Competition Chung‐Hui Chou Managerial and Decision Economics Bonus Scheme, Managerial Delegation, and Quantity Competition Chung‐Hui Chou Managerial and Decision Economics ABSTRACTThis note examines if owners would offer a bonus for each unit of output dependent on both firms' output levels in equilibrium and the impacts on market performances. The main contribution is showing that owners may lessen quantity competition more than the standard Cournot by adopting the relative quantity delegation in which they offer an incentive scheme based on profit plus a bonus for each unit of output that decreases in their own output levels but increases in rivals' ones. Consequently, contrary to conventional wisdom, output delegation increases profitability but reduces consumers' surplus. 10.1002/mde.4476 http://onlinelibrary.wiley.com/termsAndConditions#vor |
| title | Bonus Scheme, Managerial Delegation, and Quantity Competition |
| topic | Managerial and Decision Economics |
| url | https://onlinelibrary.wiley.com/doi/10.1002/mde.4476 |