Managerial Delegation Contracts, “Green” R&D and Emissions Taxation

2018 ◽  
Vol 19 (2) ◽  
Author(s):  
Joanna Poyago-Theotoky ◽  
Soo Keong Yong
Keyword(s):  
Social Welfare ◽  
Managerial Compensation ◽  
Cournot Duopoly ◽  
Emissions Tax ◽  
Managerial Delegation ◽  
Sales Compensation ◽  
Firm Owners

Abstract We introduce an explicit environmental incentive into a managerial compensation contract in the context of a Cournot duopoly with pollution externalities under an emissions tax regime. We show that, depending on the effectiveness of “green” R&D, compared to a standard sales compensation contract, the explicit environmental focused contract results in more abatement. As a consequence, the regulator sets a lower emissions tax, and social welfare is higher. Moreover, in general, firm owners earn higher profits when adopting the environmental delegation contract.

scholarly journals Extended Games Played by Managerial Firms with Asymmetric Costs

Game Theory ◽  
2014 ◽  
Vol 2014 ◽  
pp. 1-10 ◽  
Author(s):  
Leonard F. S. Wang
Keyword(s):  
Social Welfare ◽  
Price Competition ◽  
Oligopoly Model ◽  
The Social ◽  
Asymmetric Costs ◽  
Managerial Delegation ◽  
Efficiency Gap

Both demand and cost asymmetries are considered in oligopoly model with managerial delegation. It shows that (i) both efficient and inefficient firms with delegation have second move advantage under quantity setting and first move advantage under price competition; (ii) the extended games under both quantity and price competition have subgame equilibria. Lastly, the social welfare of all strategy combinations is considered to find that when the efficient firm moves first and the inefficient firm moves second under price competition, the social welfare can be higher than Bertrand case, if the efficiency gap between the two firms is huge.

scholarly journals Partial Cross-Ownership, Cost Asymmetries, and Welfare

2015 ◽  
Vol 2015 ◽  
pp. 1-7 ◽  
Author(s):  
Luciano Fanti
Keyword(s):  
Social Welfare ◽  
Policy Implication ◽  
Consumer Surplus ◽  
The Other ◽  
Total Output ◽  
Cournot Duopoly ◽  
Cross Ownership ◽  
The Cross

The present study analyses the effects on social welfare of the existence of cross-participation at ownership level in a Cournot duopoly. We show that cross-participation, although it lowers the degree of competition by reducing total output and consumer surplus, may increase social welfare, provided that (i) the firm owned by a single shareholder is less efficient than the other (cross-participated) firm and (ii) the size of the market is not too large. Therefore, the policy implication is that larger cross-participations at ownership level should be favoured, despite their anticompetitive nature, when the cross-participated firm is relatively more efficient and the extent of the market is not too large.

scholarly journals Nonlinear Dynamics of Cournot Duopoly Game: When One Firm Considers Social Welfare

2021 ◽  
Vol 2021 ◽  
pp. 1-11
Author(s):  
S. S. Askar ◽  
A. A. Elsadany
Keyword(s):  
Nonlinear Dynamics ◽  
Social Welfare ◽  
Fixed Points ◽  
Phase Plane ◽  
Complex Dynamics ◽  
Stability Conditions ◽  
Cournot Duopoly ◽  
Discrete Dynamic ◽  
Gradient Based ◽  
Dynamic Map

In this paper, we study the competition between two firms whose outputs are quantities. The first firm considers maximization of its profit while the second firm considers maximization of its social welfare. Adopting a gradient-based mechanism, we introduce a nonlinear discrete dynamic map which is used to describe the dynamics of this game. For this map, the fixed points are calculated and their stability conditions are analyzed. This includes investigating some attracting set and chaotic behaviors for the complex dynamics of the map. We have also investigated the types of the preimages that characterize the phase plane of the map and conclude that the game’s map is noninvertible of type Z 4 − Z 2 .

Wage versus efficient bargaining in a Cournot duopoly: A Preliminary Note on Welfare

Ekonomia ◽  
2019 ◽  
Vol 25 (1) ◽  
pp. 23-34
Author(s):  
Domenico Buccella
Keyword(s):  
Social Welfare ◽  
Conflict Of Interest ◽  
Cournot Duopoly ◽  
Bargaining Process ◽  
Preliminary Note ◽  
Firm Level ◽  
Public Authorities ◽  
Guiding Principles ◽  
The Impact ◽  
Efficient Bargaining

Wage versus efficient bargaining in a Cournot duopoly: A preliminary note on welfare In a unionized Cournot duopoly with decentralized, firm-level bargaining, this note re-examines the endogenous equilibrium agendas wage vs. efficient bargaining that can arise under three different specifications of the timing of negotiations and the impact of the outcome of the bargaining process on social welfare. Given that explicit conflict of interest among the bargaining parties can arise in every timing specification, this note proposes, analyzes, and discusses some guiding principles for governments and public authorities interested in pursuing social welfare improvements.

International R&D formations and strategic environmental policy

2020 ◽  
Vol 25 (5) ◽  
pp. 509-528
Author(s):  
Takeshi Iida
Keyword(s):  
Environmental Policy ◽  
Social Welfare ◽  
Information Sharing ◽  
Policy Implications ◽  
Full Information ◽  
Cournot Duopoly ◽  
The Third ◽  
Strategic Environmental Policy ◽  
Global Welfare ◽  
Research Joint Ventures

AbstractWe examine relations between strategic environmental policy, international R&D cartels and research joint ventures (RJVs), using a third-country model with Cournot duopoly. We indicate that forming an R&D/RJV cartel reduces governments' incentives to extract rent from consumers in the third country. Contrary to conventional wisdom, we find that social welfare under R&D cartels with full information sharing, i.e., RJV cartels, cannot surpass that under R&D/RJV competition, whereas forming an R&D/RJV cartel works well for environmental investment. Among the policy implications, we show that governments can maximize global welfare by collectively determining whether to allow R&D/RJV cartels.

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