# This implies q2 225 q1 45 55 q1 10 dierentiate

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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...
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## This document was uploaded on 02/20/2014.

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