The Market Mechanism as an Incentive Scheme

It is often argued that competition in the product market reduces managerial slack. We formalize this idea. Suppose that there is a common component to firms' costs, i.e., as one firm's (total and marginal) costs fall, so do those of other firms. Then when costs fall, profit-maximizing fir...

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Veröffentlicht in:	Bell Journal of Economics 1983-10, Vol.14 (2), p.366-382
1. Verfasser:	Hart, Oliver D.
Format:	Artikel
Sprache:	eng
Schlagworte:	Capital costs Competition Economic competition Economic models Economic theory Financial management Input prices Logical givens Marginal costs Market competition Market entry Product markets Profit maximization Risk aversion Supply
Online-Zugang:	Volltext
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