Answer to Question #108995 in Microeconomics for Esmat Asem

Question #108995
Can the leader ever get a lower profit in a Stackelberg equilibrium than he would get in the Cournot equilibrium?
1
Expert's answer
2020-04-13T09:08:16-0400

The Stackelberg equilibrium price is lower, so output and total surplus are higher; total profits are lower. While the first mover in a Stackelberg duopoly earns more than a Cournot duopolist, this is not necessarily true for number of moves m > 2.


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