Follower payoffs in symmetric duopoly games

This paper compares the leader and follower payoff in a duopoly game, as they arise in sequential play, with the Nash payoff in simultaneous play. If the game is symmetric, has a unique symmetric Nash equilibrium, and players' payoffs are monotonic in the opponent's choice along their own...

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Bibliographic Details
Published in:Games and economic behavior 2010-07, Vol.69 (2), p.512-516
Main Author: von Stengel, Bernhard
Format: Article
Language:English
Subjects:
Comparative analysis
Cournot
Cournot Duopoly game Endogenous timing Follower Leader Stackelberg Strategic complements Strategic substitutes
Duopoly
Duopoly game
Endogenous timing
Follower
Game theory
Leader
Leaders
Leadership
Nash equilibrium
Pay-off
Payoffs
Stackelberg
Strategic complements
Strategic substitutes
Studies
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Summary:This paper compares the leader and follower payoff in a duopoly game, as they arise in sequential play, with the Nash payoff in simultaneous play. If the game is symmetric, has a unique symmetric Nash equilibrium, and players' payoffs are monotonic in the opponent's choice along their own best reply function, then the follower payoff is either higher than the leader payoff, or even lower than in the simultaneous game. This gap for the possible follower payoff had not been observed in earlier duopoly models of endogenous timing.
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2009.10.012