Weight assigned to a rival's profit by an advantaged firm in relative performance evaluation with Cournot–Bertrand competition. (8th February 2022)

• Record Type: Journal Article
• Authors: Hamamura, Jumpei
• Is Part Of: Managerial and decision economics. Volume 43:Number 7(2022)
• Page Start: 2838
• Page End: 2844
• Publication Date: 2022-02-08
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.3565
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract : This study examines the weight placed on a rival's profit under asymmetric cost and Cournot–Bertrand competition. From our model analysis, when an advantaged firm decides quantity and a disadvantaged firm decides a price, we find the case where each firm set positive weight placed on a rival's profit. Our result suggests that decision variables in a product market are important to consider CEOs' implicit compensation contract in empirical research. In addition, it is interesting to demonstrate the advantaged firm sets positive weight placed on a rival's profit under quantity decision.