Authors: Ludovic A Julien
Publish Date: 2011/01/11
Volume: 103, Issue: 2, Pages: 171-187
Abstract
This note investigates a Stackelberg–Nash competition model We determine the conditions under which the leaders may achieve better profits than the followers when all firms compete on quantity in a two stage game We focus on the properties of the followers’ best response functions It is shown that the Stackelberg equilibrium may coincide with the Cournot equilibrium In addition the followers may achieve higher profits than the leaders Such results put forward the working and the consequences of strategic complementarities These results are illustrated with three examples
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