Scenario 13.13
Consider the game below:
-Which is true of output-choice models of oligopoly behavior?
A) Both the Stackelberg and Cournot models can be constructed as sequential games.
B) The Stackelberg, but not the Cournot, model can be constructed as a sequential game.
C) The Cournot, but not the Stackelberg, model can be constructed as a sequential game.
D) Neither the Cournot nor the Stackelberg model can be constructed as a sequential game, but other output-choice models can be.
E) There is no relationship between any output-choice model and sequential games.

Question

Scenario 13.13
Consider the game below: 
-Which is true of output-choice models of oligopoly behavior?
A) Both the Stackelberg and Cournot models can be constructed as sequential games. 
B) The Stackelberg, but not the Cournot, model can be constructed as a sequential game. 
C) The Cournot, but not the Stackelberg, model can be constructed as a sequential game. 
D) Neither the Cournot nor the Stackelberg model can be constructed as a sequential game, but other output-choice models can be. 
E) There is no relationship between any output-choice model and sequential games.

Quizplus · Accepted Answer

The Stackelberg model can be constructed as a two-stage sequential game in which one firm (the leader) sets its output first and the other firm (the follower) sets its output second. However, the Cournot model cannot be constructed as a sequential game because both firms set their outputs simultaneously without knowing the other's choice. Therefore, choice B is the correct answer.

Scenario 13.13 Consider the Game Below