Relative performance as a strategic commitment mechanism

Nolan Miller, Amit Pazgal

Research output: Contribution to journalArticlepeer-review


Can managers' personality traits be of use to profit maximizing firm owners? We investigate the case where managers have a variety of attitudes toward relative performance that are indexed by their type. We consider two stage games where profit maximizing owners select managers in the first stage, and these managers, knowing each other's types, compete in a duopoly game in the second stage. The equilibria of various types of competition are derived and comparisons are made to the standard case where managers are profit maximizers. We show that managers' types can be used as a strategic commitment device that can increase firm profits in certain environments. Copyright.

Original languageEnglish (US)
Pages (from-to)51-68
Number of pages18
JournalManagerial and Decision Economics
Issue number2
StatePublished - Mar 2002
Externally publishedYes

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation


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