Capacity Decision-Making Under Ownership Structure and Managerial Delegation in a Differentiated Duopoly
Keywords:
Managerial delegation; ownership structure; capacity; product differentiationAbstract
This study develops a decision-making framework for analyzing capacity selection under different ownership structures and managerial delegation strategies in a differentiated duopoly market. Using a three-stage Cournot game model, the research investigates how private, state-owned, and mixed-ownership enterprises make strategic capacity and production decisions under full and partial managerial delegation. The model further evaluates the effects of product differentiation, state-owned share proportion, and capital efficiency on firm performance, consumer surplus, and social welfare. The equilibrium outcomes of six competitive scenarios are comparatively examined to identify optimal managerial and ownership strategies. The findings reveal that full delegation generally leads to overcapacity regardless of ownership structure, while partial delegation enables state-owned enterprises to achieve capacity balance and improved social welfare. The results further demonstrate that product differentiation can effectively mitigate overcapacity and enhance welfare outcomes, particularly in mixed-ownership structures. In addition, the study identifies optimal state-owned share proportions under both full and partial delegation mechanisms, highlighting the strategic role of ownership design in managerial decision-making. The research contributes to the literature by integrating ownership structure, managerial delegation, and capacity selection into a unified decision-support framework and provides practical implications for strategic capacity planning, governance design, and operational management in competitive industries.
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