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When Stackelberg and Cournot Equilibria Coincide

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Author Info
Luca Colombo (Middlesex University and University of Bologna)
Paola Labrecciosa (Middlesex University and University of Bologna)

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Abstract

We take a new look at the comparison between the Stackelberg equilibrium and the Cournot equilibrium. We show that, when the elasticity of the inverse market demand equals the curvature of the inverse market demand weighted by the Lerner Index, a generic Stackelberg leader sets the same quantity and earns the same profit as a generic Stackelberg follower. When the curvature of the inverse market demand equals the total number of firms in the industry, a coincidence among the quantities produced by a first mover, a second mover, and a generic firm facing Cournot competition occurs.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Topics in Theoretical Economics.

Volume (Year): 8 (2008)
Issue (Month): 1 ()
Pages: 1434-1434
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Handle: RePEc:bep:thetop:v:8:y:2008:i:1:p:1434-1434

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Related research
Keywords: Stackelberg equilibrium Cournot equilibrium

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Find related papers by JEL classification:
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

References listed on IDEAS
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  1. Michael R. Baye & Onsong Shin, 1999. "Strategic Behavior in Contests: Comment," American Economic Review, American Economic Association, vol. 89(3), pages 691-693, June. [Downloadable!] (restricted)
  2. Avinash Dixit, 1999. "Strategic Behavior in Contests: Reply," American Economic Review, American Economic Association, vol. 89(3), pages 694-694, June. [Downloadable!] (restricted)
  3. Amir, Rabah & Grilo, Isabel, 1999. "Stackelberg versus Cournot Equilibrium," Games and Economic Behavior, Elsevier, vol. 26(1), pages 1-21, January. [Downloadable!] (restricted)
  4. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March. [Downloadable!] (restricted)
    Other versions:
  5. Gal-Or, Esther, 1985. "First Mover and Second Mover Advantages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 649-53, October. [Downloadable!] (restricted)
  6. Mailath George J., 1993. "Endogenous Sequencing of Firm Decisions," Journal of Economic Theory, Elsevier, vol. 59(1), pages 169-182, February. [Downloadable!] (restricted)
  7. Robson, Arthur J, 1990. "Duopoly with Endogenous Strategic Timing: Stackelberg Regained," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 263-74, May. [Downloadable!] (restricted)
  8. Deneckere, Raymond J & Kovenock, Dan, 1992. "Price Leadership," Review of Economic Studies, Blackwell Publishing, vol. 59(1), pages 143-62, January. [Downloadable!] (restricted)
    Other versions:
    • Raymond Deneckere & Dan Kovenock, 1988. "Price Leadership," Discussion Papers 773, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  9. Steve Dowrick, 1986. "von Stackelberg and Cournot Duopoly: Choosing Roles," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 251-260, Summer. [Downloadable!] (restricted)
  10. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December. [Downloadable!] (restricted)
  11. Anderson, Simon P & Engers, Maxim, 1994. "Strategic Investment and Timing of Entry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(4), pages 833-53, November. [Downloadable!] (restricted)
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This page was last updated on 2008-11-13.

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