Divisionalization and strategic managerial incentives in oligopoly under uncertainty

Article Abstract:

Incentive contracting and divisionalization are shown to function as complementary rent shifting tools when subjected to demand uncertainty. Divisionalization arises once managers have knowledge of the state of demand before the output decisions are made and if incentive agreements are non-state contingent and linear. Incentive contracts are able to achieve expected outcomes but have no effect on the firm's responsiveness to demand shock, a lack that is made up for by divisionalization.

Management Functions, Methods, Management, Corporate governance, Incentives (Business)

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Pass-through rates and the price effects of mergers

Article Abstract:

The association in Bertrand oligopoly between price effects of mergers absent synergies and pass-through rates is examined. It is shown that as the price of mergers increases, the rate at which merger synergies pass through to customers also increases.

Europe, Analysis, Certificates of participation (Securities), Participation certificates (Securities)

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Horizontal mergers and delegation

Article Abstract:

Merger profitability in oligopoly is found to be much improved if the output decision is delegated to an agent.

Mergers & Acquisitions

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