Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 28, 2005 erstellt
Beschreibung:
This paper studies a simultaneous-move infinite-horizon delegation game in which the principal of a durable goods monopoly entrusts pricing decisions to a manager who enjoys monetary rewards but dislikes production effort. We show that cheap delegation enables the principal to attain the precommitment price plan in a time consistent Markov-perfect equilibrium. The paper analyzes the robustness of this result under alternative specifications of timing and objectives. We also provide a numerical characterization of the Markov-perfect equilibrium pricing and remuneration strategies for the case of linear-quadratic payoffs