Information Advantage in Stackelberg Duopoly under Demand Uncertainty
We consider a Stackelberg model under demand slope uncertainty in an environment where the follower owns information advantage. Specifically, we show that the second mover obtains higher expected profit than the first mover when the leader only knows the prior beliefs and the follower gains the posterior probabilities. This result tells us that the leadership advantage is dominated by the information advantage when demand fluctuation is important.
|Date of creation:||01 Dec 2007|
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- Malueg, David A. & Tsutsui, Shunichi O., 1996. "Duopoly information exchange: The case of unknown slope," International Journal of Industrial Organization, Elsevier, vol. 14(1), pages 119-136.
- Chokler, Adi & Hon-Snir, Shlomit & Kim, Moshe & Shitovitz, Benyamin, 2006. "Information disadvantage in linear Cournot duopolies with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 785-793, July.
- Esther Gal-Or, 1987. "First Mover Disadvantages with Private Information," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 279-292.
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