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Market Instability in a Stackelberg Duopoly

Author

Listed:
  • Toshihiro Matsumura

    (Institute of Social Science, University of Tokyo, 7-3-1, Hongo, Bunkyo-ku, Tokyo 113-0033, Japan (e-mail: matsumur@iss.u-tokyo.ac.jp))

Abstract

m -period duopoly model with inventory costs, where each firm chooses when to produce. We find that, in contrast to most existing works concerning endogenous roles of the firms, no pure strategy equilibrium exists when m is strictly larger than two. This result indicates that no stable pattern of allocation of roles exists except for a two-period model; thus the leader-follower relationship inevitably becomes instable.

Suggested Citation

  • Toshihiro Matsumura, 2002. "Market Instability in a Stackelberg Duopoly," Journal of Economics, Springer, vol. 75(3), pages 199-210, April.
    • Handle: RePEc:kap:jeczfn:v:75:y:2002:i:3:d:10.1007_s007120200016
    DOI: 10.1007/s007120200016
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    Citations

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    Cited by:

    1. Yan, Bo & Ahmadi, Atefeh & Mehrabbeik, Mahtab & Rajagopal, Karthikeyan & He, Shaobo & Jafari, Sajad, 2022. "Expanding the duopoly Stackelberg game with marginal costs into a multipoly game with lowering the burden of mathematical calculations: a numerical analysis," Chaos, Solitons & Fractals, Elsevier, vol. 164(C).
    2. Miguel Fonseca & Wieland Müller & Hans-Theo Normann, 2006. "Endogenous timing in duopoly: experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 443-456, October.
    3. Zili Yang, 2013. "Is the Leading Role Desirable?: A Simulation Analysis of the Stackelberg Behavior in World Petroleum Market," Computational Economics, Springer;Society for Computational Economics, vol. 42(1), pages 133-150, June.
    4. Attila Tasnádi, 2016. "Endogenous timing of moves in Bertrand–Edgeworth triopolies," International Journal of Economic Theory, The International Society for Economic Theory, vol. 12(4), pages 317-334, December.
    5. 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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