The Limits of Limited Commitment

Jacopo Bizzotto, Toomas Hinnosaar and Adrien Vigier

American Economic Journal: Microeconomics, 2026, vol. 18, issue 1, 254-80

Abstract: We study limited strategic leadership. A collection of subsets covering the leader's action space determines her commitment opportunities. We characterize the outcomes resulting from all possible commitment structures of this kind. If the commitment structure is an interval partition, then the leader's payoff is bounded by her Stackelberg and Cournot payoffs. Under general commitment structures, the leader may obtain a payoff that is less than her lowest Cournot payoff. We apply our results to a textbook duopoly model and characterize the commitment structures leading to consumer- and producer-optimal outcomes.

JEL-codes: C72 D43 (search for similar items in EconPapers)
Date: 2026
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Related works:
Working Paper: The Limits of Limited Commitment (2025)
Working Paper: The Limits of Limited Commitment (2022)
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DOI: 10.1257/mic.20240310

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