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Leader and Follower: A Differential Game Model

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Author Info
Hassan Benchekroun
Ngo Van Long ()

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Abstract

We consider a differential game between two players, where one player has the first mover advantage. We compare the equilibrium strategy profile of this model with the one generated by a conventional symmetric model. It is shown that the existence of a first mover results in more conservationist exploitation in the aggregate. We also consider the implication of departures from the equilibrium. We show that if the leader (the first mover) can commit to decrease its effort over a finite interval of time, then the follower (the second mover) may respond by increasing, or decreasing, its effort, depending on the length of the commitment period.

On analyse un jeu différentiel entre deux joueurs, dont le premier a l'avantage de prendre sa décision avant son adversaire. On compare le profil de stratégies d'équilibre de ce modèle avec celui d'un modèle d'actions symétriques. On démontre que l'existence d'un leader favorise la conservation dans l'exploitation du stock commun. On analyse les déviations possibles à partir d'un équilibre. On démontre que si le leader peux s'engager à une politique d'exploitation plus modérée, alors le suiveur peux répondre plus ou moins agressivement, selon la durée de la période d'engagement.

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Publisher Info
Paper provided by CIRANO in its series CIRANO Working Papers with number 2001s-08.

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Date of creation: 01 Feb 2001
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Handle: RePEc:cir:cirwor:2001s-08

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Related research
Keywords: Leadership; differential games; Leadership; jeux différentiels;

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

References listed on IDEAS
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  1. Missios, Paul C. & Plourde, Charles, 1997. "Transboundary Renewable Resource Management And Conservation Motives," Marine Resource Economics, Marine Resources Foundation, vol. 12(1). [Downloadable!]
  2. Paul C. Missios & Charles Plourde, 1996. "The Canada-European Union Turbot War: A Brief Game Theoretic Analysis," Canadian Public Policy, University of Toronto Press, vol. 22(2), pages 144-150, June. [Downloadable!] (restricted)
  3. Kathleen A. Miller, 1996. "Salmon Stock Variability And The Political Economy Of The Pacific Salmon Treaty," Contemporary Economic Policy, Western Economic Association International, vol. 14(3), pages 112-129, 07. [Downloadable!] (restricted)
  4. Sinn, Hans-Werner, 1984. "Common Property Resources, Storage Facilities and Ownership Structures: A Cournot Model of the Oil Market," Economica, London School of Economics and Political Science, vol. 51(23), pages 235-52, August.
  5. Crabbe, Philippe & Van Long, Ngo, 1993. "Entry deterrence and overexploitation of the fishery," Journal of Economic Dynamics and Control, Elsevier, vol. 17(4), pages 679-704, July. [Downloadable!] (restricted)
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  6. Plourde, C G, 1970. "A Simple Model of Replenishable Natural Resource Exploitation," American Economic Review, American Economic Association, vol. 60(3), pages 518-22, June.
  7. Thomas, J, 1992. "Cartel Stability in an Exhaustible Resource Model," Economica, London School of Economics and Political Science, vol. 59(235), pages 279-93, August. [Downloadable!] (restricted)
  8. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring. [Downloadable!] (restricted)
  9. Chiarella, Carl, et al, 1984. "On the Economics of International Fisheries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 85-92, February. [Downloadable!] (restricted)
  10. Fischer, Ronald D. & Mirman, Leonard J., 1992. "Strategic dynamic interaction : Fish wars," Journal of Economic Dynamics and Control, Elsevier, vol. 16(2), pages 267-287, April. [Downloadable!] (restricted)
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