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ERIC Number: EJ1106719
Record Type: Journal
Publication Date: 2016
Pages: 15
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-0022-0485
EISSN: N/A
When Do First-Movers Have an Advantage? A Stackelberg Classroom Experiment
Rebelein, Robert; Turkay, Evsen
Journal of Economic Education, v47 n3 p226-240 2016
The timing of moves can dramatically affect firm profits and market outcomes. When firms choose output quantities, there is a first-mover advantage, and when firms choose prices, there is a second-mover advantage. Students often find it difficult to understand the differences between these two situations. This classroom experiment simulates each scenario in a way that makes it easy for students to understand the theoretical reasons for the different possible outcomes. The authors have developed a two-firm classroom experiment where students first play a Stackelberg game in which firms sequentially choose production quantities and then a Stackelberg game in which firms sequentially choose prices. When choosing quantities, it is advantageous to move first, and when choosing prices, it is advantageous to wait.
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Publication Type: Journal Articles; Reports - Evaluative; Tests/Questionnaires
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A