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

Author

Listed:
  • Janssen, M.C.W.
  • Maasland, E.

    (Tilburg University, Center For Economic Research)

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.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Janssen, M.C.W. & Maasland, E., 1997. "On the Unique D1 Equilibrium in the Stackelberg Model with Asymmetric Information," Discussion Paper 1997-106, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:cb1945aa-057b-48d0-aad2-578349b35870
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    References listed on IDEAS

    as
    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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    Citations

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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

    Keywords

    Separating equilibria; signalling games; Stackelberg competition;
    All these keywords.

    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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