Sharing managerial contract information in a vertically related market

Recent research shows that in duopolies with strategic delegation, firm owners have an incentive to always share information about managerial compensation contracts. We study how sharing of contract is affected by the presence a supplier. find under quantity competition, partial information‐sharing equilibrium may occur. Firms punish their managers for sales soften supplier pricing. Mandating increases total welfare but decreases consumer surplus. Under price firms want information. Finally, profits can be higher competition than competition.