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HOW MANY FIRMS BECOME LEADERS? *
Author(s) -
MATSUMURA TOSHIHIRO
Publication year - 1997
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.1997.tb00815.x
Subject(s) - period (music) , action (physics) , oligopoly , first mover advantage , business , economics , microeconomics , industrial organization , cournot competition , physics , quantum mechanics , acoustics
This paper investigates a quantity‐setting oligopoly model with endogenous timing. We formulate an n ‐firm two‐period model. Each firm chooses whether to take its action in period 1 or take its action in period 2 after observing the first‐period actions of other firms. We call firms taking their actions in period 1 ‘leaders’ and those taking action in period 2 ‘following’. We find that the number of followers is at most one regardless of whether leaders have first mover advantage.