Question #108995
Can the leader ever get a lower profit in a Stackelberg equilibrium than he would get in the Cournot equilibrium?
Expert's answer
The Stackelberg equilibrium price is lower, so output and total surplus are higher; total profits are lower. While the first mover in a Stackelberg duopoly earns more than a Cournot duopolist, this is not necessarily true for number of moves m > 2.
