First Mover Disadvantages with Private Information

Esther Gal-Or ()

The Review of Economic Studies, 1987, vol. 54, issue 2, 279-292

Abstract: We consider a leader-follower game with output quantities as strategies, so as to demonstrate the reduced advantages of the Stackleberg leader in a stochastic environment with private information. At the equilibrium, the strategy of the leader reveals to the follower information about the demand. In an attempt to signal low demand, the leader contracts his output. Nevertheless, unless the leader's information is infinitely noisy, the follower can always correctly infer his signal. We find a wide range of parameter values over which the follower is better off compared to the leader.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (69)

Downloads: (external link)
http://hdl.handle.net/10.2307/2297517 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
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:oup:restud:v:54:y:1987:i:2:p:279-292.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().