Strategic Product Design Under Duopoly

Strategic Delegation in an Experimental Mixed Duopoly

We provide the first test of the consequences of delegation in a mixed duopoly. Such delegation allows a profit maximizing private owner and a welfare maximizing public owner to give a separate weight to sales in managerial contracts. Theory predicts that such contracts improve welfare. Our experimental evidence indicates that both public and private owners do provide a weight on sales consiste...

Information complements, substitutes, and strategic product design

Process Innovation, Product Differentiation, and Channel Structure: Strategic Incentives in a Duopoly

In this paper we analyze the joint implications of two effects: (a) inserting independent profit-maximizing retailers into the channel system provides “buffering” to the manufacturers from price competition when their products are highly substitutable and intrachannel contracts are observable (as shown by McGuire and Staelin 1983 under the assumption of constant marginal production costs), and,...

Exit in duopoly under uncertainty

This paper examines a declining duopoly, where the firms must choose when to exit from the market. The uncertainty is modeled by letting the revenue stream follow a geometric Brownian motion. We consider the Markovperfect equilibrium in firms’ exit strategies. With a low degree of uncertainty there is a unique equilibrium, where one of the firms always exits before the other. However, when unce...

Strategic Acquisitions and Investments in a Duopoly Patent Race under Uncertainty

This paper uses a continuous-time real-options patent-race model to study a patent-race game in which a firm with larger research bandwidth competes with a firm with smaller bandwidth. The large firm can make strategic acquisitions or investments in the small firm subject to transactions costs. Acquisitions occur when the small firm is about to make pre-emptive investments or the large firm has...