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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 13, No. 1, pp.21-35
ISSN: 1225-0279 (Print)
Print publication date 29 Feb 2000
Received Dec 1999 Revised Mar 2000

Incentive Delegation and Collusion

Arijit Mukherjee
Post-doctoral Researcher, Technische Universiteit Eindhoven, Faculteit Technologie Management, Den Dolech 2, P.O. Box 513, 5600 MB Eindhoven, the Netherlands, Tel: +31-40-247-2924, Fax: +31-40-247-4646 A.Mukherjee@tm.tue.nl

JEL Classification: D21, L13, L20

Abstract

In an infinitely repeated duopoly we show the implications of strategic incentive delegation. Whether incentive delegation makes consumers or producers better-off depends on the nature of competition. We explain that the presence or absence of incentive delegation may affect the interests of the consumers and the producers in a similar way.

Acknowledgments

I would like to thank two anonymous referees of this journal for their valuable comments and suggestions. I acknowledge the financial support from the Netherlands Technology Foundation (STW).

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