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On the Unique D1 Equilibrium in the Stackelberg Model with Asymmetric Information

Author

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  • Maarten C.W. Janssen

    (University of Vienna, Austria)

  • Emiel Maasland

    (Erasmus University Rotterdam, the Netherlands)

Abstract

This note studies a version of the Stackelberg model in which the Leader has more information aboutdemand than the Follower. We show that there exists a unique D1 equilibrium and that this equilibriumis perfectly revealing. We also give a full characterization of the equilibrium in terms of the posteriorbeliefs of the Follower and show under which condition there is first mover disadvantage.

Suggested Citation

  • Maarten C.W. Janssen & Emiel Maasland, 1997. "On the Unique D1 Equilibrium in the Stackelberg Model with Asymmetric Information," Tinbergen Institute Discussion Papers 97-073/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:19970073
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    References listed on IDEAS

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    1. Mailath George J., 1993. "Endogenous Sequencing of Firm Decisions," Journal of Economic Theory, Elsevier, vol. 59(1), pages 169-182, February.
    2. Ramey, Garey, 1996. "D1 Signaling Equilibria with Multiple Signals and a Continuum of Types," Journal of Economic Theory, Elsevier, vol. 69(2), pages 508-531, May.
    3. Daughety, Andrew F & Reinganum, Jennifer F, 1994. "Asymmetric Information Acquisition and Behavior in Role Choice Models: An Endogenously Generated Signaling Game," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(4), pages 795-819, November.
    4. Cho, In-Koo & Sobel, Joel, 1990. "Strategic stability and uniqueness in signaling games," Journal of Economic Theory, Elsevier, vol. 50(2), pages 381-413, April.
    5. Esther Gal-Or, 1987. "First Mover Disadvantages with Private Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(2), pages 279-292.
    6. Mailath, George J, 1987. "Incentive Compatibility in Signaling Games with a Continuum of Types," Econometrica, Econometric Society, vol. 55(6), pages 1349-1365, November.
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    Cited by:

    1. Cumbul, Eray, 2021. "Stackelberg versus Cournot oligopoly with private information," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    2. John S. Hughes & Jennifer L. Kao, 2001. "Vertical Integration and Proprietary Information Transfers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(2), pages 277-299, June.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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