Template-type: ReDif-Paper 1.0
Author-Name: Haan Marco
Author-Name: Maks Hans 
Author-workplace-name: METEOR
Title: Stackelberg and Cournot competition under equilibrium limit pricing
Abstract: In this paper we show that the claim that the price in a Stackelberg model is lower than the price in a Cournot model, does not necessarily hold in an entry-deterrence framework. Using a signaling model of entry deterrence, we show that when post-entry competition is Stackelberg instead of Cournot, this might in uence the entry decision of a potential entrant in such a way that expected average price can actually be higher under Stackelberg competition. In a simple framework with linear demand and constant marginal costs, we derive the condition under which this holds.
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 1996
Number: 002
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:2ce1606c-1a64-4ae8-af86-349d91b50c83/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 313214
Handle: RePEc:unm:umamet:1996002