Scenario 13.14
Consider the game below:
-The game in Scenario 13.14:
A) is Stackelberg if both players move at the same time; Cournot if one player moves first.
B) is Cournot if both players move at the same time; Stackelberg if one player moves first.
C) is Stackelberg no matter what the timing of moves.
D) is Cournot no matter what the timing of moves.
E) is neither Stackelberg nor Cournot.

Question

Scenario 13.14
Consider the game below: 
-The game in Scenario 13.14:
A) is Stackelberg if both players move at the same time; Cournot if one player moves first. 
B) is Cournot if both players move at the same time; Stackelberg if one player moves first. 
C) is Stackelberg no matter what the timing of moves. 
D) is Cournot no matter what the timing of moves. 
E) is neither Stackelberg nor Cournot.

Quizplus · Accepted Answer

The game is Cournot if both players move at the same time, as in a standard Cournot game. However, if one player moves first and the other player observes their move before making their own decision, then the game becomes Stackelberg. This is because the player who moves first can anticipate the response of the other player and choose their quantity accordingly, taking into account the other player's reaction function. Therefore, the game is both Cournot and Stackelberg depending on the timing of moves.

Scenario 13.14 Consider the Game Below