How does the solution to coumots duopoly model


Assignment:

1. With reference to the Jensen and Meckling (1976) model of corporate ownership, what conditions need to hold for an owner-manager to find it beneficial to dilute his or her ownership stake? Fully explain your answer.

2. Provide a thorough account of how the assumption that is made about the distribution of information between the principal and agent affects the solution to the principal agent problem?

3. What are adverse selection and moral hazard, why can they undermine markets and what measures can be taken by market participants to restore value to transactions involving asymmetric information?

4. How does the solution to Coumot's (1838) duopoly model compare with those of other models on oligopolistic competition with which you are familiar? Fully explain your answer.

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Managerial Economics: How does the solution to coumots duopoly model
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