Vertical externality and strategic delegation

This paper examines the effects of vertical externality generated by the upstream monopoly on the incentives that owners of competing downstream firms give their managers. It is shown that the introduction of the upstream monopoly may have significant effects on the incentive schemes for the downstream firms' managers. In particular, it is shown that in equilibrium, each owner obtains the simple Nash equilibrium outcome regardless of the mode of competition (quantity or price) in the downstream market. Copyright © 2002 John Wiley & Sons, Ltd.     

R&D in a strategic delegation game

This paper studies how a separation of ownership and management affects firms' R&D and production decisions in Cournot quantity competition. It is found that when R&D spillovers are small, owners strategically direct their managers away from profit maximization towards sales. Consequently, managerial firms invest more in R&D and have higher output and lower prices compared to their entrepreneurial counterparts. On the other hand, when spillovers are large, owners ‘penalize’ managers for sales. In this case, managerial firms have lower R&D, lower output and higher prices. Nonetheless, managerial firms have lower profits than their entrepreneurial counterparts regardless of spillovers. This paper also examines the welfare effects of a separation of ownership and management. It is found that in terms of first-best social welfare, managerial firms are more (less) efficient than their entrepreneurial counterparts with low (high) spillovers. However, in terms of second-best social welfare, managerial firms are less efficient with all spillovers. © 1997 John Wiley & Sons, Ltd.     

R&D spillovers and strategic delegation in oligopolistic contests

Considering oligopolistic contests with R&D spillovers and strategic delegation three results can be obtained: (1) There exist multiple asymmetric equilibria where one owner highly favors sales as a basis for his manager's incentives which drives the other firm out of the market. (2) If R&D spillovers are zero, a managerial firm will have a strong strategic advantage when competing with an entrepreneurial firm. If both owners endogenously decide about delegation, each owner's dominant strategy will be to delegate, given that the manager's reservation value is not too large. (3) If R&D spillovers are maximal, collusive market outcomes become very likely, which makes strategic delegation less important. Copyright © 2004 John Wiley & Sons, Ltd.     

A model of strategic delegation in contests between groups

We analyze a contest between two groups where group members have differing valuations for the contested rent. Generically the pivotal group member with the median valuation of the rent will not act himself but will want to send a group member that has preferences different to her own into the contest. The delegation can be either to more or less “radical” group members. The direction of delegation depends on the order of moves and the relative “aggressiveness” of the group medians. We show that almost certainly very asymmetric equilibria arise, even if the median group members value the rent (almost) equally. Delegation can lead to a social improvement in terms of resources spent in the contest. We are indebted to Tobias Boehm, Nicolas Klein, Kai Konrad, Dan Kovenock, Matthias Messner, Johannes Muenster, Ray Rees, Hans Zenger and seminar participants at the 2005 Meeting of the Public Choice Society, the European Public Choice Society, the Royal Economic Society, the WZB Berlin, and the Universities of Guelph and Munich for their comments and suggestions. The editor, Massimo Morelli, and an anonymous referee helped to substantially improve the paper.     

Commitment in R&D tournaments via strategic delegation to overoptimistic managers

This paper shows that it is profitable for a firm to hire an overoptimistic manager to commit to a certain investment strategy in an R&D tournament situation. In the unique symmetric equilibrium, all firms delegate to overoptimistic managers, where the optimal degree of overoptimism depends on the riskiness of the tournament. In these situations a manager's type may serve as a substitute for delegation via contracts. By delegating to overoptimistic managers, firms can escape the rat race nature of R&D tournaments. Copyright © 2010 John Wiley & Sons, Ltd.     

Cooperation with a multiproduct corporation in a strategic managerial delegation

We consider an industry composed of a multiproduct corporation that adopts corporate social responsibility (CSR) as a strategic managerial delegation and examine the profit-incentive to form a cooperative group. We find that competition is an equilibrium for any degree of substitutability and yields the highest CSR, which is increasing in the degree of substitutability. We also show that full cooperation is an equilibrium for lower substitutability but induces no CSR, whereas partial cooperation with one uniplant firm is an equilibrium for higher substitutability but yields lower CSR than that under competition. Therefore, cooperation might reduce strategic CSR activities, whereas competition will encourage higher CSR but yield lower industry profits.     

R&D in a strategic delegation game revisited: a note

In this note we reconsider the paper of Zhang and Zhang (1997), published in Managerial and Decision Economics, who analyze a strategic delegation model with R&D spillovers in an imperfectly competitive market. We were motivated to study their setup by a puzzling result given in their paper: delegating the production and R&D decisions to managers is never beneficial for the owners of the firm. When we tried to understand the driving forces of this result, we found however that the findings of Zhang and Zhang (1997) are incorrect. We explain why their derivations are wrong and demonstrate via counterexamples that the main propositions in their paper do not hold. In addition, we show how the correct solution of this R&D model with spillovers can be obtained. Copyright © 2006 John Wiley & Sons, Ltd.     

Apple's disaster: Linking two‐sided markets and strategic delegation

Asymmetric pricing structure and different intergroup network externalities are characteristics of two‐sided markets not captured in the analysis of one‐sided markets. Focusing on Cournot duopoly where membership decision may be delegated to a manager, several equilibrium regimes are sustained depending on the fixed cost of managerial hiring and strength of the network externality exerted by the side whose demand is more price sensitive. The change from null to full delegation sharpens the asymmetric pricing structure and reduces the price level in two‐sided markets. Contrary to one‐sided markets with direct network effects, the prisoner's dilemma holds for sufficiently strong indirect network externalities. Imperfect interside discrimination of managerial incentives ensures profit maximization and efficient consumers' allocation. Private hiring should occur when the two‐sided market exhibits symmetric pricing structure. An explanation for Apple's unprecedented event is provided. The reduction of revenue and managerial bonus in 2016 may be justified by the dissemination of full delegation in the Chinese information technology industry. Apple's upcoming strategy may consist on reducing both access prices, although the side whose demand is more price sensitive should have a greater price reduction. Alternatively, improving the content quality may constitute Apple's corporate strategy, thereby inducing a skimming pricing strategy on Chinese rivals.     

The equivalence of supporting software delegation and sales delegation

This paper considers a duopoly market with horizontally differentiated system goods to examine system owners' behaviors under supporting software delegation, in which owners of system firms use varieties of supporting software, coupled with profit, to evaluate their managers' performance. Supporting software delegation seems to induce managers to act more aggressively in price competition than sales delegation does; however, we prove that if two systems are compatible and the varieties of supporting software are determined by hardware owners' overall expenditure amount on software, then supporting software delegation is equivalent to sales delegation. Owners of system firms induce their managers to act less aggressively in hardware price competition by offering contracts with a negative weight on varieties of supporting software under supporting software delegation. We find that stronger network externalities do not reverse system owners' contracting behaviors under supporting software delegation. Finally, it is worth mentioning that hardware technologies are static in this paper. In other words, dynamic changes such as hardware evolution are not considered in our analysis.     

Wage delegation in the field

By conducting a natural field experiment, we analyze the managerial policy of delegating the wage choice to employees. We find that this policy enhances performance significantly, which is remarkable since allocated wage premiums of the same size have no effect at all. Observed self‐imposed wage restraints and absence of negative peer effects speak in favor of wage delegation, although the chosen wage premium levels severely dampen its net value. Additional experimental and survey data provide important insights into employees' underlying motivations.     

Strategic delegation in oligopolistic tournaments

This paper considers a two-stage game with two owners and two managers. At the first stage, the owners choose a linear combination of profits and sales as incentives for their managers. At the second stage, the two managers compete in an oligopolistic tournament against each other. The findings substantially differ from the results for Cournot or Bertrand oligopoly: There exist asymmetric equilibria where one owner puts a positive weight on sales and the other a negative one, although the structure of the game is completely symmetric. If the influence of noise vanishes, the owner of the more aggressive firm will even induce sales maximization to his manager in order to preempt his competitor. Received: 22 April 2004, Accepted: 25 December 2005 JEL Classification: L1, M2 I would like to thank the editor Semih Koray, two anonymous referees, Ulf Schiller, Dirk Sliwka, Gunter Steiner, and the participants of the Microeconomics Seminar of the Humboldt University at Berlin for very helpful comments. Financial support by the Deutsche Forschungsgemeinschaft (DFG), grant KR 2077/2-3 and SFB/TR 15 ("Governance and the Efficiency of Economic Systems"), is gratefully acknowledged.     

Managerial delegation games and corporate social responsibility

In a duopoly in which firms universally engage in corporate social responsibility (CSR) activities, this paper shows that, in contrast to the main tenet of the received managerial delegation literature, if the CSR sensitivity is sufficiently high: (a) when both firms delegate output decisions to managers, at the equilibrium profit (resp. consumer welfare) is higher (resp. lower) than when firms are pure CSR; (b) in a managerial delegation game, asymmetric multiple subgame perfect Nash equilibria emerge in which one firm delegates and the rival does not. These results hold under both the “sales delegation” and “relative profits” manager's bonus schemes.     

歧视性政府采购理论及启示

国外的歧视性政府采购理论主要有度量理论、贸易保护理论和降低采购成本理论.在吸收已有研究成果的基础上,我国应根据本国国情,进一步完善歧视性政府采购理论研究,摸清我国歧视性政府采购的实际情况,逐步开放我国政府采购市场,同时对有战略意义的新产业尽量保留歧视性政府采购.     

Discriminatory practices in hiring: institutional and rational economic perspectives

A number of research studies have analysed the causes, conditions and consequences of discrimination. Most of these have focused on either gender or racial discrimination. Studies of discrimination on other grounds, including disability, have been relatively less common. This study attempts to theoretically and empirically explore the nature of discrimination against disabled job applicants from the rational economic, as well as institutional theory, perspectives. The rational economic perspective emphasizes individual self-interest, conscious decision-making, and economic optimization. Institutional theory focuses on organizational actions taken to gain legitimacy rather than for monetary or utility optimization. Legitimacy is important to secure stakeholders' trust and recognition, and translates into favourable outcomes, such as resource support, customer loyalty, and ease in attracting qualified personnel. We test these two theories, using data drawn from 227 New Zealand organizations, which collectively employ approximately 10 per cent of that country's workforce. The evidence suggests that both theories to some extent predict discrimination based on disability. Employer behaviour reflects both rational concerns for cost minimization and institutional concerns for perceived legitimacy in the eyes of key stakeholders. The strength of each concern appears to vary with each employer's circumstances.     

Integrating strategic human capital and strategic human resource management

Abstract

Human capital is an important construct in a variety of fields spanning from micro scholarship in psychology to macro scholarship in economics. Within the various disciplinary perspectives, research focuses on slightly different aspects and levels of human capital within organizations, which may give opportunities for integration. The current paper aims to increase knowledge about human capital within organizations by integrating two streams of research which focus directly on human capital, but have approached human capital in different ways: strategic human capital (SHC), and strategic HRM. We describe both SHC and strategic HRM research streams and propose areas of integration, and directions for future research on human capital in organizations.     

A property rights approach to legislative delegation

This paper applies the property rights theory to study both positive and normative aspects of legislative delegation in a setup where interest groups directly influence lawmaking by initiating regulatory bargaining. A self-interested legislature choosing between the direct exercise of its legislative authority and delegation to an administrative agency must therefore trade off the value of bureaucratic competence against bureaucratic drift and, importantly, loss of control over bargaining. Our analysis, first, clarifies when the legislature’s choice between delegation and no delegation is socially efficient or socially inefficient; second, highlights the role of political bargaining and shows that precluding interest group influence through bargaining may actually increase the scope for socially inefficient outcomes; and, third, illustrates the model’s predictions in light of selected stylized facts and the practice of scant empirical work on legislative delegation.     

抓好战略管理实现战略制胜

本文围绕抓好战略管理,实现战略制胜这一中心,集中论述了企业战略管理中的三个重要问题:一是战略管理的必要性、重要性和紧迫性;二是战略管理中的五个基本矛盾,即组织与环境的矛盾,资源与目标的矛盾,旧业与新业的矛盾,生存与发展的矛盾,兴办企业与保护环境的矛盾;三是抓好战略管理对企业管理者的要求.     

Preference-Based Discrimination and Profit: On the Profitability of Discriminatory Spatial Policy

In many markets, firms are able to conduct discriminatory strategies based on whether a customer prefers a competitors' product or their own. This article considers the impact of such discrimination in duopoly models in which firms set prices and conduct precontract-customization efforts for some customers. We identify two effects: (1) The ability to conduct preference-based discrimination increases equilibrium profit as long as long as precontract customization is at least modestly important in competitive dynamics; and (2) The ability to conduct preference-based discrimination enhances social welfare if any precontract customization is done.     

支付能力差异、入学机会与学费的歧视性定价

社会成员之间的支付能力差异是任何社会客观存在的经济现象。学费制度下,解决支付能力差异,实现教育公平目标的基本思路有两条:一是对不同的人群实施有效的学生资助,二是对不同的人群制定不同的学费——歧视性定价,且两种解决方式可以实现有机的耦合。建立完善我国有效的大学生资助体系,制定科学合理、分类有序的学费定价制度,实行学费的歧视定价,是深化我国高等教育学费制度改革有效路径。