Executive compensation in oligopolies: Sales, profits and pay

Marc C. Chopin

Research output: Chapter in Book/Report/Conference proceedingChapter


This chapter analyzes the owner-manager contracting problem for firms competing in imperfectly competitive markets. The strategic interdependence of firms results in optimal incentive contracts that either compensate or penalize managers for sales. The predictions of the model are tested empirically and estimates of contract coefficients are reported. The results fail to confirm the predictions of the theoretical model; however, the coefficient estimates suggest that while the effects of profits and sales on compensation vary significantly across firms and industries, managers of most firms are rewarded for increases in firm profits.

Original languageEnglish (US)
Title of host publicationAdvances in Applied Microeconomics
PublisherJAI Press
Number of pages22
ISBN (Print)0762305762, 9780762305766
StatePublished - 1999

Publication series

NameAdvances in Applied Microeconomics
ISSN (Print)0278-0984

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)


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