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- W4251425673 abstract "The interaction between managerial incentives and strategic behavior in a duopolistic industry is explored. Managers are differentiated by their ability to reduce overhead costs. A manager's current compensation is an increasing function of firm profit while his future income depends on the labor market's beliefs over his ability. For the purpose of enhancing their reputation in the labor market, we show that managers choose to produce in excess of that predicted by profit maximization. This result applies only to imperfectly competitive industries. Though the intensity of competition is independent of industry volatility when firms are profit maximizers, we find that the price-cost margin is decreasing in the variance of industry-wide shocks when firms are manager-run." @default.
- W4251425673 created "2022-05-12" @default.
- W4251425673 date "1989-06-01" @default.
- W4251425673 modified "2023-10-16" @default.
- W4251425673 title "Developments" @default.
- W4251425673 doi "https://doi.org/10.1016/0140-3664(89)90123-0" @default.
- W4251425673 hasPublicationYear "1989" @default.
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