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The Decision to Hire Managers in Mixed Markets under Bertrand Competition

The Decision to Hire Managers in Mixed Markets under Bertrand Competition Abstract This paper analyses the decisions of firms as to whether or not to hire managers when there is a public firm competing with a private firm in the product market. It is shown that under Bertrand competition with heterogeneous goods both firms hire managers. This is in contrast with the result obtained under Cournot competition, where only the private firm hires a manager. Moreover, welfare is lower if both firms hire managers than if neither firm does. In contrast, under Cournot competition welfare is greater if both firms hire managers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Japanese Economic Review Springer Journals

The Decision to Hire Managers in Mixed Markets under Bertrand Competition

Bárcena-Ruiz, Juan Carlos
The Japanese Economic Review , Volume 60 (3): 13 – Sep 1, 2009
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References (14)

Publisher
Springer Journals
Copyright
2008 Japanese Economic Association
ISSN
1352-4739
eISSN
1468-5876
DOI
10.1111/j.1468-5876.2008.00455.x
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper analyses the decisions of firms as to whether or not to hire managers when there is a public firm competing with a private firm in the product market. It is shown that under Bertrand competition with heterogeneous goods both firms hire managers. This is in contrast with the result obtained under Cournot competition, where only the private firm hires a manager. Moreover, welfare is lower if both firms hire managers than if neither firm does. In contrast, under Cournot competition welfare is greater if both firms hire managers.

Journal

The Japanese Economic Review – Springer Journals

Published: Sep 1, 2009

Keywords: economics, general; microeconomics; macroeconomics/monetary economics//financial economics; econometrics; development economics; economic history

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