Extended games played by managerial firms

The issue of timing is addressed in a game between managerial firms. The ch oice over timing can be taken either by managers or by entrepreneurs. It is shown that (i) delegation drastically modifies the owners' preferences con cerning the distribution of roles, as compared with the setting where firms act as pure profit-maximizers; and (ii) the ability of moving first in the market game entails that, at least observationally, the owner of the leadi ng firm prefers not to delegate. I show that the choice of the timing by ma nagers entails the same profit that owners would achieve by specifying the timing in the delegation contract.