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One-Leader and Multiple-Follower Stackelberg Games with Private Information

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  • Tomoya Nakamura

Abstract

This study analyzes one-leader and multiple-follower Stackelberg games with private information regarding demand uncertainty. In the equilibrium of the Stackelberg games, a leader's private information becomes public information among followers. This study demonstrates that the strategic relationship between the leader and each follower is determined by the weight on public information regarding a follower's estimation of demand uncertainty. If the weight is sufficiently low (high), then the relationship is a strategic substitute (complement), and the leader has a first-mover (dis)advantage, respectively. In the case of strategic complementarity, the leader can exit from a market. The threshold is determined by the intensity of Cournot competition among the followers.

Suggested Citation

  • Tomoya Nakamura, 2014. "One-Leader and Multiple-Follower Stackelberg Games with Private Information," ISER Discussion Paper 0908, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:0908
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