COURNOT Vs STACKELBERG EQUILIBRIA WITH APUBLIC ENTERPRISE AND INTERNATIONALCOMPETITION

This paper examines the validity of alternative assumptions aboutpublic enterprise strategies in the presence of both domestic and internationalcompetition. It extends the quantity-setting game to apreplay stage and endogenizes the firms’ order of moves to show thati) Cournot competition is not the subgame perfect Nash equilibriumof the extended game, ii) the only SPN equilibria are sequential andiii) for some values of structural parameters, public Stackelberg leadershipis the unique SPN equilibrium solution of the game...