This paper examines which of the Stackelberg leader or its follower has the advantage under strategic subsidy policy in a third market model. We show that even if governments choose export subsidies in whichever of a simultaneous-move or sequential-move game, the leader firm always loses its...

We develop a few numerical models to examine the moral hazard problems exemplified by Itoh (2003, Ch. 4), following our earlier study (Hashimoto et al. (2011)) on the adverse selection problems. To this end, we first model a risk averse or risk neutral entrepreneur who selects his action among...

By building and solving numerical models of the parts supply problems (an example of the adverse selection problems), and analyzing various issues of the contract theory, we demonstrate the benefits of the numerical approach. First, this approach facilitates the understanding of the contract...

This is a study to develop and solve numerical models based on Itoh’s (2003, Ch. 1) “Parts Supply Problems” for better understanding the contract theory. In the first part of this paper, by following Itoh (2003) we investigate 2- and 3-agent type cases; in the succeeding part, by using...

This study is a theoretical examination of whether employee‐controlled firms (ECFs) enter a free‐entry oligopolistic market excessively or insufficiently, from the viewpoint of welfare maximization. The excess entry theorem is well known in oligopoly theory. According to this theorem, a...