Economics, Econometrics and Finance
4 years ago

Leader or follower? New study shows it doesn't matter in duopoly equilibrium.

RePEc: Research Papers in Economics
Relative profit maximization and irrelevance of leadership in Stackelberg model
Yasuhito Tanaka

Paper Summary

The article shows that in a market with two companies selling similar products, the leader and follower end up selling the same amount at the same price. It doesn't matter who leads or follows. The prices and quantities sold stay the same whether the companies set prices or quantities.

Related papers

Economics, Econometrics and Finance
4 years ago

Fierce competition drives prices down in crowded markets, benefiting consumers.

Monetary Models
Market Dynamics
Two-Sided Markets
Business, Management and Accounting
4 years ago

Spatial competition reshapes markets, leading to higher profits for first movers.

Coopetition
Market Dynamics
Two-Sided Markets
Economics, Econometrics and Finance
4 years ago

Stackelberg Strategy Boosts Prices and Profits in Oligopoly Competition

Climate Policies
Mechanism Design
Monetary Models