Social performance versus relative performance evaluation, asymmetric costs, and quantity competition under managerial delegation. (16th November 2022)

• Record Type: Journal Article
• Authors: Hamamura, Jumpei; Ramani, Vinay
• Is Part Of: Managerial and decision economics. Volume 44:Number 3(2023)
• Page Start: 1706
• Page End: 1719
• Publication Date: 2022-11-16
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.3777
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract: This paper considers asymmetric performance evaluation measures in a duopoly with asymmetric costs and managerial delegation under quantity competition. Asymmetry along performance measures as well as cost leads to a several surprising results. First, we find that the social performance firm with a cost advantage earns a larger profit than its rival under a specific economic environment. Second, when the relative performance firm has the cost advantage, both firms adopt a less aggressive strategy under specific conditions, while the relative performance firm always earns a larger profit than its rival.