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When Stackelberg and Cournot Equilibria Coincide

Author

Listed:
  • Colombo Luca

    (Middlesex University and University of Bologna)

  • Labrecciosa Paola

    (Middlesex University and University of Bologna)

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.

Suggested Citation

  • Colombo Luca & Labrecciosa Paola, 2008. "When Stackelberg and Cournot Equilibria Coincide," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-7, January.
    • Handle: RePEc:bpj:bejtec:v:8:y:2008:i:1:n:1
    DOI: 10.2202/1935-1704.1434
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    Cited by:

    1. Antonio Ruiz - Porras, 2008. "Los beneficios del liderazgo en el mercado de depositos bancarios: Una comparacion entre Cournot y Stackelberg," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 4(2), pages 79-105, Enero-Jun.
    2. Bruno Versaevel, 2009. "Cumulative Leadership and Entry Dynamics," Post-Print halshs-00371847, HAL.
    3. Bruno Versaevel, 2015. "Alertness, Leadership, and Nascent Market Dynamics," Dynamic Games and Applications, Springer, vol. 5(4), pages 440-466, December.
    4. Johannes W. Fedderke & Witness Simbanegavi, 2008. "Price Elasticities and Pricing Power in Emerging Markets: The Case of Petrochemicals Derived Plastics in South Africa," Working Papers 078, Economic Research Southern Africa.
    5. Davies, Ronald B., 2013. "The silver lining of red tape," Journal of Public Economics, Elsevier, vol. 101(C), pages 68-76.
    6. Qi Duan & Yupeng Shi & Jingwei Sun, 2017. "Intellectual Property Protection: Prevention in Advance or Punishment Afterward," Annals of Economics and Finance, Society for AEF, vol. 18(1), pages 129-171, May.

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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