1 The Scope of Strategic Delegation in Oligopoly

This paper explores the scope of strategic delegation, to the firms ’ R&D investments and market competition in a Cournot Oligopoly. The firms ’ owners ’ have three alternative strategies: Full delegation (FD), in which firms ’ owners delegate both short run and long run decisions to their managers, Partial delegation (PD) in which firms ’ owners delegate only short run decisions to their managers and No delegation (ND) in which no decision is delegated to managers. Secondly we investigate which delegation scenario will emerge in equilibrium. We find that Partial delegation is always an equilibrium. Full delegation is an equilibrium only if the initial unit cost is relative high. Finally we find that although welfare and production are improved under delegation, they still remain lower than their socially first best levels