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Stackelberg versus Cournot: a differential game approach

Version 2 2024-06-13, 11:44
Version 1 2019-03-21, 10:03
journal contribution
posted on 2024-06-13, 11:44 authored by L Colombo, Paola Labrecciosa
We propose an infinite-horizon differential oligopoly game where, at each point in time, m Stackelberg leaders and n − m Stackelberg followers exploit a common-pool renewable resource and sell their harvest in the marketplace at a price that depends on total harvest. We derive a feedback-generalized-Stackelberg–Nash–Cournot equilibrium (a generalization of the feedback Stackelberg equilibrium), nesting feedback Stackelberg and feedback Cournot as special cases. We proceed with a comparison between the feedback Stackelberg and the feedback Cournot equilibria, and find a number of interesting results in contrast with “static” oligopoly theory. As to the relative efficiency of the two equilibria, we show that the Cournot equilibrium can be more efficient than the Stackelberg equilibrium. This holds true in the short-run, at the steady-state, and in terms of discounted welfare

History

Journal

Journal of economic dynamics and control

Volume

101

Pagination

239-261

Location

Amsterdam, The Netherlands

ISSN

0165-1889

Language

eng

Publication classification

C Journal article, C1 Refereed article in a scholarly journal

Copyright notice

2019, Elsevier B.V.

Publisher

Elsevier