Flexibility in a Stackelberg leadership with differentiated goods

• Type: Article in International Scientific Journal
• Date: 2015

Authors

Ferreira, FA (Author) Other; Ferreira, F (Author) Other; Ferreira, M (Author) Other; Pinto, AA (Author) FCUP

Journal

Title: Optimization

Vol. 64 No. 11

Pages: 877-893

ISSN: 0233-1934

Publisher: Taylor & Francis

Indexing

ISI Web of Knowledge - 4 Citations

Scopus - 6 Citations

Scientific classification

FOS: Natural sciences > Mathematics

Other information

Authenticus ID: P-008-E6S

DOI: 10.1080/02331934.2013.836649

Abstract (EN): We study the effects of product differentiation in a Stackelberg model with demand uncertainty for the first mover. We do an ex-ante and ex-post analysis of the profits of the leader and of the follower firms in terms of product differentiation and of the demand uncertainty. We show that even with small uncertainty about the demand, the follower firm can achieve greater profits than the leader, if their products are sufficiently differentiated. We also compute the probability of the second firm having higher profit than the leading firm, subsequently showing the advantages and disadvantages of being either the leader or the follower firm.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 17