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Strategic Choice of Quantity Stickiness and Stackelberg Leadership

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  • Hirokawa, Midori
  • Sasaki, Dan

Abstract

This paper re-examines endogenous Stackelberg leader-follower relations by modelling an explicitly dynamic market. We analyze a twice-repeated duopoly where, in the beginning, each firm chooses either a quantity-sticky production mode or a quantity-flexible production mode. The size of the market becomes observable after the first period. In the second period, a firm can adjust its quantity if and only if it has adopted the flexible mode. Hence, if one firm chooses the sticky mode whilst the other chooses the flexible mode, then they respectively play the roles of a Stackelberg leader and a Stackelberg follower in the second marketing period. Somewhat intriguing is the finding that such a Stackelberg-like equilibrium can arise only when the relative weight of the pre-Stackelberg first marketing period is sufficiently high, with time preferences being sufficiently strong. Copyright 2001 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

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  • Hirokawa, Midori & Sasaki, Dan, 2001. "Strategic Choice of Quantity Stickiness and Stackelberg Leadership," Bulletin of Economic Research, Wiley Blackwell, vol. 53(1), pages 19-34, January.
    • Handle: RePEc:bla:buecrs:v:53:y:2001:i:1:p:19-34
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    Cited by:

    1. Zhiyong Liu, 2005. "Stackelberg leadership with demand uncertainty," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 345-350.
    2. Maja Barac & Rafael Moner‐Colonques, 2022. "Leadership in internationalization strategies," Manchester School, University of Manchester, vol. 90(3), pages 293-318, June.
    3. Toshihiro Matsumura, 2003. "Stackelberg Mixed Duopoly with a Foreign Competitor," Bulletin of Economic Research, Wiley Blackwell, vol. 55(3), pages 275-287, July.

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