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A theoretical study on yardstick competition and franchise bidding based on a dynamic model

Title	A theoretical study on yardstick competition and franchise bidding based on a dynamic model
Creator	Creator Name HARADA, Shumpei HARADA, Shumpei 原田, 峻平原田, 峻平 Affiliation Affiliation Name Kyusyu Sangyo University
Creator	Creator Name YAMAUCHI, Hirotaka YAMAUCHI, Hirotaka 山内, 弘隆山内, 弘隆 Affiliation Affiliation Name Hitotsubashi University
Key Word	yardstick competition
	franchise bidding
	collusion
	dynamic model
	hidden action
	hidden information
Abstract	This study aimed to develop a dynamic model based on the static model of Harada and Yamauchi (2014), which compares yardstick competition with franchise bidding. We focus on collusion among firms, which is one of the differences between dynamic and static models. As a result, we showed that Shleifer-style yardstick competition, which can work well under the static model, cannot work well under the dynamic model. On the other hand, franchise bidding may work well under certain conditions. Thus, we showed that franchise bidding is superior to yardstick competition.
Publisher	Graduate School of Commerce and Management, Hitotsubashi University
Issued Date	2015-02
Language	English(eng)
Resource Type	technical report
Version Type	VoR
Is Part OfRelation -	Related Title Working paper ; No. 144
Number of Pages	14
Appears in Collections	Working Paper / School of Business Administration, Hitotsubashi University Business School
URL	https://hdl.handle.net/10086/27091