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Cournot and Stackelberg equilibrium under strategic delegation: an equivalence result

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  • Giorgos Stamatopoulos

    (University of Crete)

Abstract

This paper uses the theory of strategic delegation to derive an equivalence between the models of simultaneous and sequential quantity competition in oligopoly. It shows that Cournot and Stackelberg equilibria under managerial delegation are identical provided delegation is sequential under the first framework and simultaneous under the second. Furthermore, the first (second) mover in the game under sequential delegation earns the same profit as the second (first) mover in the game under sequential quantity competition.

Suggested Citation

  • Giorgos Stamatopoulos, 2016. "Cournot and Stackelberg equilibrium under strategic delegation: an equivalence result," Theory and Decision, Springer, vol. 81(4), pages 553-570, November.
    • Handle: RePEc:kap:theord:v:81:y:2016:i:4:d:10.1007_s11238-016-9548-x
    DOI: 10.1007/s11238-016-9548-x
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    References listed on IDEAS

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    Cited by:

    1. Michelacakis, Nickolas, 2016. "Strategic delegation effects on Cournot and Stackelberg competition," MPRA Paper 71052, University Library of Munich, Germany.

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    More about this item

    Keywords

    Strategic delegation; Cournot competition; Stackelberg competition; Equivalence;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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