The Profits of the Leader in a Stackelberg Duopoly

question 66

Multiple Choice

The profits of the leader in a Stackelberg duopoly:

• A) are less than those of the follower.
• B) equal those of the follower.
• C) are greater than those of the follower.
• D) are less than those of a Sweezy oligopolist.

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Definitions:

Mixed Strategies

A strategic decision in a game where players randomize over two or more available actions in order to keep opponents uncertain of their next move.

Expected Payoffs

The forecasted return on an investment or decision, taken as the weighted average of all possible outcomes, considering their probabilities.

Mixed Strategy Equilibrium

Mixed Strategy Equilibrium is a concept in game theory where each player in a game randomizes over possible moves according to a specific probability distribution, and no player can benefit by changing their strategy unilaterally.

Pure Strategy Equilibria

A situation in game theory where all players have chosen a strategy and have no incentive to change, leading to a stable outcome.