Do Followers Really Matter in Stackelberg Competition?

Ludovic Julien (), Olivier Musy and Aurélien Saïdi

Lecturas de Economía, 2011, issue 75, 11-27

Abstract: In this paper, we consider a T-stage linear model of Stackelberg oligopoly. First, we show geometrically and analytically that under the two conditions of linear market demand and identical constant marginal costs, the T-stage Stackelberg model reduces to a model where T oligopolies exploit residual demand sequentially. At any stage, leaders behave as if followers did not matter. Second, we study social welfare and convergence toward competitive equilibrium. Especially, we consider the velocity of convergence as the number of firms increases. The convergence is faster when reallocating firms from the most to the less populated cohort until equalizing the size of all cohorts.

Keywords: leader's markup discount ratio; linear economy; follower's output index; generalized Stackelberg competition (search for similar items in EconPapers)
JEL-codes: L13 L20 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://revistas.udea.edu.co/index.php/lecturasdeeconomia/issue/view/1117 (application/pdf)

Related works:
Journal Article: Do Followers Really Matter in Stackelberg Competition? (2011)
Working Paper: Do followers really matter in Stackelberg competition? (2011)
Working Paper: Do followers really matter in Stackelberg competition? (2011)
Working Paper: Do followers really matter in Stackelberg competition? (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lde:journl:y:2011:i:75:p:11-27

Ordering information: This journal article can be ordered from
Lecturas de Economía, Departamento de Economía, Calle 67, 53-108, Medellin 050010, Colombia.

Access Statistics for this article

Lecturas de Economía is currently edited by Carlos Andrés Vasco Correa

More articles in Lecturas de Economía from Universidad de Antioquia, Departamento de Economía Contact information at EDIRC.
Bibliographic data for series maintained by Carlos Andrés Vasco Correa ().