Please use this identifier to cite or link to this item: https://hdl.handle.net/20.500.11851/3979
Title: Stackelberg versus Cournot oligopoly with private information
Authors: Cumbul, Eray
Keywords: Stackelberg
Cournot
Private and public information
Signaling games
Cost uncertainty
Demand and quality uncertainty
First and late-mover advantages
Issue Date: Jan-2021
Publisher: Elsevier Inc.
Source: Cumbul, E. (2019). Stackelberg versus Cournot oligopoly with private information. Available at SSRN 3199987.
Abstract: We compare an n-firm Cournot model with a Stackelberg model, where n-firms choose outputs sequentially, in a stochastic demand environment with private information. The expected total output, consumer surplus, and total surplus are lower, while expected price and total profits are higher in the Stackelberg perfect revealing equilibrium than in the Cournot equilibrium. These rankings are the opposite of the rankings of prices, total output, surplus, and profits under perfect information. We also show that the first n?1 firms’ expected profits form a decreasing sequence from the first to the (n?1)st in the Stackelberg game. The last mover earns more expected profit than the first mover if n?4, or the ratio of the signals’ informativeness to the prior certainty is sufficiently low. Lastly, there is a discontinuity between the Stackelberg equilibrium of the perfect information game and the limit of Stackelberg perfect revealing equilibria, as the noise of the demand information of firms vanishes to zero at the same rate. We provide various robustness checks for the results when the precision of signals are asymmetric, there is public information or cost/quality uncertainty, or the products are differentiated.
URI: https://hdl.handle.net/20.500.11851/3979
https://doi.org/10.1016/j.ijindorg.2020.102674
ISSN: 0167-7187
Appears in Collections:İktisat Bölümü / Department of Economics
Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection
WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection

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