Reexamination of Stackelberg Leadership: Fixed Supply Contracts Under Demand Uncertainty

M. Hirokawa and D. Sasaki

No 600, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper shows an endogenous Stackelberg leader-follower relation that stems purely from commitment, not from chronological order of entry. We consider a symmetric duopoly game with a priori demand uncertainty which resolves after a short term. In the beginning, each supplier is allowed to make either a short-term or a long-term fixed-quantity supply contract with retailers. The choice of contractual term lengths depends upon the degree of demand uncertainty as well as time preferences.

Keywords: DYNAMIC ANALYSIS; DEMAND (search for similar items in EconPapers)
JEL-codes: C72 D43 L13 (search for similar items in EconPapers)
Pages: 17 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:600

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