This implies q2 225 q1 45 55 q1 10 dierentiate

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: What quantity would it choose? • Is there a first mover advantage in the Cournot oligopoly game? M&S 452 — Strat and Org c 2008 Scott Schaefer M&S 452 — Strat and Org c 2008 Scott Schaefer T e e e e Q∗ = 30 2 45 rr Q2 e e e e e e R Q∗ = 30 1 45 Q1 e e rr e rr e re r rr e e rr r e rr e r r e rr 2 e rr e r rr e r e rr e rE e r rr e e e e e R1 • Note that this is different from the Cournot outcome. • This implies Q2 = 22.5. Q1 = 45 55 − Q1 = 10 • Differentiate with respect to Q1: M&S 452 — Strat and Org c 2008 Scott Schaefer 16 15 17 18 • Suppose a firm in a simultaneous move game were to announce prior to play that it intended to play the Stackelberg leader quantity. Is this statement credible? If you were this firm’s opponent, what quantity would you play? M&S 452 — Strat and Org c 2008 Scott Schaefer • What keeps the leader firm from selecting an even higher quantity? • Moving first is valuable in this game. The ability to pre-select a quantity increa...
View Full Document

This document was uploaded on 02/20/2014.

Ask a homework question - tutors are online