Delegation and Horizontal Mergers in a Differentiated Bertrand Oligopoly
Bertrand 竞争下异质产品企业委托授权与横向兼并效应分析

First,in the context of a Bertrand oligopoly with differentiated products,using a two-stage game model,the paper studies the drivers of the use of strategic delegation and their impact on firms' profit and the degree of industry competition,we show that the market results are less competitive under a strategic delegation regime than under a non-delegation regime,and the price and the profit levels are higher under the strategic delegation regime than under the non-delegation regime.Then,the paper studies merger effects under strategic delegation,we show that the firms have enormous incentive for merger under centralized delegation.In particular,when the degree of product substitution is higher,the incentive for merger will be stronger under the strategic delegation regime than under the non-delegation regime.Finally,we discusses the adjustments of firms' managerial incentives after merger,and show that the selections of incentive scheme have substantially difference between the merger firm and non-merger firms.More precisely,after the merger process,the merger firm provides a more (less) aggressively incentive scheme to its managers when degree of product substitution is higher(smaller),but other non-merger firms always give a less aggressively incentive scheme to its managers.