We revisit the Cournot duopoly game with strategic delegation and asymmetric costs of Delbono, Lambertini, and Marattin (2016). In particular, the authors claim that a Prisoner Dilemma always arises. However, we show that, by setting properly the admissible parameter set, if the firms are sufficiently different, the efficient firm is better off when both firms delegate production. Therefore, in contrast with the traditional view, we claim that a Prisoner Dilemma is not an inevitable outcome in a strategic delegation game.

Colombo, S., Strategic delegation under cost asymmetry revised, <<OPERATIONS RESEARCH LETTERS>>, 2019; (47): 527-529. [doi:10.1016/j.orl.2019.09.008] [http://hdl.handle.net/10807/142565]

Strategic delegation under cost asymmetry revised

Colombo, Stefano
2019

Abstract

We revisit the Cournot duopoly game with strategic delegation and asymmetric costs of Delbono, Lambertini, and Marattin (2016). In particular, the authors claim that a Prisoner Dilemma always arises. However, we show that, by setting properly the admissible parameter set, if the firms are sufficiently different, the efficient firm is better off when both firms delegate production. Therefore, in contrast with the traditional view, we claim that a Prisoner Dilemma is not an inevitable outcome in a strategic delegation game.
Inglese
Colombo, S., Strategic delegation under cost asymmetry revised, <<OPERATIONS RESEARCH LETTERS>>, 2019; (47): 527-529. [doi:10.1016/j.orl.2019.09.008] [http://hdl.handle.net/10807/142565]
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10807/142565
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