Oligopolistic Screening and Two-Way Distortion

Michela Cella, Federico Etro
2010 Social Science Research Network  
We analyze the choice of incentive contracts by oligopolistic firms that compete on the product market. Managers have private information and in the first stage they exert cost reducing effort. In equilibrium the standard "no distortion at the top" property disappears and two way distortions are optimal. We extend our analysis to other informational, contractual and competitive settings.
doi:10.2139/ssrn.1738920 fatcat:u6omhesgengq7bdljdqkwh2y7u