Quotation Dockner, Engelbert, Löffler, Clemens . 2015. Rivalry Restraint as Equilibrium Behavior. Journal of Economics and Management Strategy 24 S. 189-209.




Rivalry restraint has received a lot of attention as a theory of profits in recent research on business strategy. Its economic rationale is explained as the consequences of either exogenous or endogenous anticompetitive forces present in different industries. In this paper, we use a dynamic oligopolistic industry model and show that rivalry restraint emerges as equilibrium behavior among firm owners who delegate decisions to managers. In the corresponding two-stage game, managers choose optimal production rates in a dynamic Cournot market and owners set incentives for managers, acting sequentially rational. Equilibrium incentives correspond to rivalry restraint, that is, managers are less aggressive in the product market with lower outputs and increasing profits for all firms in the industry.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Economics and Management Strategy
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-C, WH-A
Language English
Title Rivalry Restraint as Equilibrium Behavior
Volume 24
Year 2015
Page from 189
Page to 209
Reviewed? Y
URL http://onlinelibrary.wiley.com/doi/10.1111/jems.12081/abstract
DOI http://dx.doi.org/10.1111/jems.12081


Dockner, Engelbert (Details)
Löffler, Clemens (Universität Wien, Austria)
Institute for Finance, Banking and Insurance IN (Details)
Research Institute for Capital Markets FI (Details)
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