IDEAS home Printed from https://ideas.repec.org/a/taf/jeduce/v47y2016i3p226-240.html
   My bibliography  Save this article

When do first-movers have an advantage? A Stackelberg classroom experiment

Author

Listed:
  • Robert Rebelein
  • Evsen Turkay

Abstract

The timing of moves can dramatically affect firm profits and market outcomes. When firms choose output quantities, there is a first-mover advantage, and when firms choose prices, there is a second-mover advantage. Students often find it difficult to understand the differences between these two situations. This classroom experiment simulates each scenario in a way that makes it easy for students to understand the theoretical reasons for the different possible outcomes. The authors have developed a two-firm classroom experiment where students first play a Stackelberg game in which firms sequentially choose production quantities and then a Stackelberg game in which firms sequentially choose prices. When choosing quantities, it is advantageous to move first, and when choosing prices, it is advantageous to wait.

Suggested Citation

  • Robert Rebelein & Evsen Turkay, 2016. "When do first-movers have an advantage? A Stackelberg classroom experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 47(3), pages 226-240, July.
  • Handle: RePEc:taf:jeduce:v:47:y:2016:i:3:p:226-240
    DOI: 10.1080/00220485.2016.1179144
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00220485.2016.1179144
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00220485.2016.1179144?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andreas Ortmann, 2003. "Bertrand Price Undercutting: A Brief Classroom Demonstration," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(1), pages 21-26, January.
    2. Charles A. Holt, 1999. "Teaching Economics with Classroom Experiments: A Symposium," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 603-610, January.
    3. Niven Winchester, 2006. "A Classroom Tariff-Setting Game," The Journal of Economic Education, Taylor & Francis Journals, vol. 37(4), pages 431-441, October.
    4. Steve Dowrick, 1986. "von Stackelberg and Cournot Duopoly: Choosing Roles," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 251-260, Summer.
    5. Michael Watts & William E. Becker, 2008. "A Little More than Chalk and Talk: Results from a Third National Survey of Teaching Methods in Undergraduate Economics Courses," The Journal of Economic Education, Taylor & Francis Journals, vol. 39(3), pages 273-286, July.
    6. Charles A. Holt, 1999. "Teaching Economics with Classroom Experiments: A Symposium," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 603-610, January.
    7. Steven R. Beckman, 2003. "Cournot and Bertrand Games," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(1), pages 27-35, January.
    8. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    9. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Neligh, Nathaniel, 2020. "Vying for dominance: An experiment in dynamic network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 719-739.

    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. Ya‐chin Wang & Leonard F.s. Wang, 2009. "Equivalence Of Competition Mode In A Vertically Differentiated Duopoly With Delegation," South African Journal of Economics, Economic Society of South Africa, vol. 77(4), pages 577-590, December.
    2. Delbono, Flavio & Lambertini, Luca, 2018. "Choosing roles under supply function competition," Energy Economics, Elsevier, vol. 71(C), pages 83-88.
    3. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107069978.
    4. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
    5. Matsui, Kenji, 2017. "When should a manufacturer set its direct price and wholesale price in dual-channel supply chains?," European Journal of Operational Research, Elsevier, vol. 258(2), pages 501-511.
    6. Lau, Sau-Him Paul, 2001. "Aggregate Pattern of Time-dependent Adjustment Rules, II: Strategic Complementarity and Endogenous Nonsynchronization," Journal of Economic Theory, Elsevier, vol. 98(2), pages 199-231, June.
    7. Kempf, Hubert & Rota-Graziosi, Grégoire, 2010. "Endogenizing leadership in tax competition," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 768-776, October.
    8. Haufler, Andreas & Pflüger, Michael, 2003. "Market structure and the taxation of international trade," Discussion Papers in Economics 106, University of Munich, Department of Economics.
    9. Juan Carlos Bárcena-Ruiz, 2006. "Environmental Taxes and First-Mover Advantages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(1), pages 19-39, September.
    10. Matsui, Kenji, 2016. "Asymmetric product distribution between symmetric manufacturers using dual-channel supply chains," European Journal of Operational Research, Elsevier, vol. 248(2), pages 646-657.
    11. Hoffmann, Magnus & Rota-Graziosi, Grégoire, 2012. "Endogenous timing in general rent-seeking and conflict models," Games and Economic Behavior, Elsevier, vol. 75(1), pages 168-184.
    12. Hubert Kempf & Grégoire Rota-Graziosi, 2010. "Endogenizing leadership in the tax competition race," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00492105, HAL.
    13. Colombo, Stefano & Lambertini, Luca, 2023. "R&D investments with spillovers and endogenous horizontal differentiation," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    14. Michele Santoni, 2000. "Specific Excise Taxation in a Unionized Differentiated Duopoly," Public Finance Review, , vol. 28(4), pages 351-371, July.
    15. Vives, Xavier & Jun, Byoung, 2001. "Incentives in Dynamic Duopoly," CEPR Discussion Papers 2899, C.E.P.R. Discussion Papers.
    16. Margarida Catalão-Lopes, 2002. "Merge or Concentrate? Some Insights for Antitrust Policy," Working Papers w200207, Banco de Portugal, Economics and Research Department.
    17. Blavatskyy, Pavlo, 2018. "Oligopolistic price competition with a continuous demand," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 123-131.
    18. Yasuhiko Nakamura, 2015. "Endogenous Choice of Strategic Variables in an Asymmetric Duopoly with Respect to the Demand Functions that Firms Face," Manchester School, University of Manchester, vol. 83(5), pages 546-567, September.
    19. Don J. Webber & Andrew Mearman, 2012. "Students’ perceptions of economics: identifying demand for further study," Applied Economics, Taylor & Francis Journals, vol. 44(9), pages 1121-1132, March.
    20. Guangliang Ye, 2016. "Leadership and Privatisation in a Mixed Multi-product Oligopoly: An Endogenous Timing Model," Australian Economic Papers, Wiley Blackwell, vol. 55(2), pages 170-180, June.

    More about this item

    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:taf:jeduce:v:47:y:2016:i:3:p:226-240. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/VECE20 .

    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.