IDEAS home Printed from https://ideas.repec.org/p/oml/wpaper/202206.html
   My bibliography  Save this paper

The Limits of Commitment

Author

Listed:
  • Jacopo Bizzotto

    (Oslo Business School, Oslo Metropolitan University)

  • Toomas Hinnosaar

    (University of Nottingham)

  • Adrien Vigier

    (University of Oxford)

Abstract

We study partial commitment in leader-follower games. A collection of subsets covering the leader's action space determines her commitment opportunities. We characterize the outcomes resulting from all possible commitment structures of this kind. If the commitment structure is an interval partition, then the leader's payoff is bounded by the payoffs she obtains under the full and no-commitment benchmarks. We apply our results to study new design problems.

Suggested Citation

  • Jacopo Bizzotto & Toomas Hinnosaar & Adrien Vigier, 2022. "The Limits of Commitment," Working Papers 202206, Oslo Metropolitan University, Oslo Business School.
    • Handle: RePEc:oml:wpaper:202206
    DOI: 10.48550/arXiv.2205.05546
    as

    Download full text from publisher

    File URL: https://doi.org/10.48550/arXiv.2205.05546
    Download Restriction: no
    File URL: https://libkey.io/10.48550/arXiv.2205.05546?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dirk Bergemann & Benjamin Brooks & Stephen Morris, 2015. "The Limits of Price Discrimination," American Economic Review, American Economic Association, vol. 105(3), pages 921-957, March.
    2. Dixit, Avinash, 1980. "The Role of Investment in Entry-Deterrence," Economic Journal, Royal Economic Society, vol. 90(357), pages 95-106, March.
    3. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 259-276.
    4. Romano, Richard & Yildirim, Huseyin, 2005. "On the endogeneity of Cournot-Nash and Stackelberg equilibria: games of accumulation," Journal of Economic Theory, Elsevier, vol. 120(1), pages 73-107, January.
    5. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    6. Andrea Gallice & Ignacio Monzón, 2019. "Co-operation in Social Dilemmas Through Position Uncertainty," The Economic Journal, Royal Economic Society, vol. 129(621), pages 2137-2154.
    7. Saloner, Garth, 1987. "Cournot duopoly with two production periods," Journal of Economic Theory, Elsevier, vol. 42(1), pages 183-187, June.
    8. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large Fixed Costs," Econometrica, Econometric Society, vol. 56(3), pages 549-569, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jacopo Bizzotto & Toomas Hinnosaar & Adrien Vigier, 2022. "The Limits of Limited Commitment," Papers 2205.05546, arXiv.org, revised Apr 2024.
    2. Sébastien Mitraille & Michel Moreaux, 2013. "Inventories and Endogenous Stackelberg Leadership in Two‐Period Cournot Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 852-874, December.
    3. Dutta, Rohan & Ishii, Ryosuke, 2016. "Dynamic commitment games, efficiency and coordination," Journal of Economic Theory, Elsevier, vol. 163(C), pages 699-727.
    4. Krishnan S. Anand & Karan Girotra, 2007. "The Strategic Perils of Delayed Differentiation," Management Science, INFORMS, vol. 53(5), pages 697-712, May.
    5. Parimal Kanti Bag & Santanu Roy, 2008. "Repeated Charitable Contributions under Incomplete Information," Economic Journal, Royal Economic Society, vol. 118(525), pages 60-91, January.
    6. Bade, Sophie & Haeringer, Guillaume & Renou, Ludovic, 2009. "Bilateral commitment," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1817-1831, July.
    7. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
    8. Romano, Richard & Yildirim, Huseyin, 2005. "On the endogeneity of Cournot-Nash and Stackelberg equilibria: games of accumulation," Journal of Economic Theory, Elsevier, vol. 120(1), pages 73-107, January.
    9. Poddar, Sougata & Sasaki, Dan, 2002. "The strategic benefit from advance production," European Journal of Political Economy, Elsevier, vol. 18(3), pages 579-595, September.
    10. Guillermo Caruana & Liran Einav, 2008. "Production targets," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 990-1017, December.
    11. Miettinen, Topi & Perea, Andrés, 2015. "Commitment in alternating offers bargaining," Mathematical Social Sciences, Elsevier, vol. 76(C), pages 12-18.
    12. Matros, Alexander & Smirnov, Vladimir, 2016. "Duplicative search," Games and Economic Behavior, Elsevier, vol. 99(C), pages 1-22.
    13. Mujumdar, Sudesh & Pal, Debashis, 2007. "Strategic managerial incentives in a two-period Cournot duopoly," Games and Economic Behavior, Elsevier, vol. 58(2), pages 338-353, February.
    14. Gautam Gowrisankaran & Thomas J. Holmes, 2000. "Do mergers lead to monopoly in the long run? Results from the dominant firm model," Staff Report 264, Federal Reserve Bank of Minneapolis.
    15. Vettas, Nikolaos & Biglaiser, Gary, 2004. "Dynamic Price Competition with Capacity Constraints and Strategic Buyers," CEPR Discussion Papers 4315, C.E.P.R. Discussion Papers.
    16. Vives, Xavier & Jun, Byoung, 2001. "Incentives in Dynamic Duopoly," CEPR Discussion Papers 2899, C.E.P.R. Discussion Papers.
    17. Yoshihiro Tomaru & Yasuhiko Nakamura & Masayuki Saito, 2009. "Capacity Choice in a Mixed Duopoly with Managerial Delegation," Economics Bulletin, AccessEcon, vol. 29(3), pages 1904-1924.
    18. Bergman, Mats A., 1998. "Endogenous Timing of Investments Yields Modified Stackelberg Outcomes," SSE/EFI Working Paper Series in Economics and Finance 272, Stockholm School of Economics.
    19. Kurt Annen, 2019. "On the first mover advantage in Stackelberg quantity games," Journal of Economics, Springer, vol. 126(3), pages 249-258, April.
    20. Arnold, Jan & Minner, Stefan, 2011. "Financial and operational instruments for commodity procurement in quantity competition," International Journal of Production Economics, Elsevier, vol. 131(1), pages 96-106, May.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oml:wpaper:202206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eirik Hanssen (email available below). General contact details of provider: https://edirc.repec.org/data/ohioano.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.