Managerial Delegation in a Dynamic Renewable Resource Oligopoly

Abstract

I propose a differential oligopoly game of resource extraction under linear and nonlinear feedback strategies, where firms are managerial and delegation contract are based on output levels. The model shows that delegation expands the set of stable nonlinear feedback equilibria as well as the residual steady state resource stock. Additionally, the separation between ownership and control mitigates the voracity effect associated with high values of the reproduction rate of the resource.