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Do followers really matter in Stackelberg competition?

¿Importan realmente los seguidores en la competencia de Stackelberg?

Ludovic Julien, Olivier Musy and Aurélien Saidi ()

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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; razón de descuento del markup del líder; economía lineal; índice de producto del seguidor; competencia de Stackelberg generalizada; facteurs d'escompte markup; économie linéaire; modèle généralisé de Stackelberg (search for similar items in EconPapers)
Date: 2011
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Published in Lecturas de Economia, CIE Universidad de Antioquia, 2011, pp.11-27

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