Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313197 
Year of Publication: 
2023
Citation: 
[Journal:] International Journal of Game Theory [ISSN:] 1432-1270 [Volume:] 52 [Issue:] 3 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2023 [Pages:] 775-804
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
We analyze price leadership in a Stackelberg game with incomplete information and imperfect commitment. Sequential play is induced by an information system, represented by a spy, that reports the price of one firm to its rival before the latter chooses its own price. However, the Stackelberg leader may secretly revise its price with some probability. Therefore, the spy’s message is only an imperfect signal. This gives rise to a complex signaling problem where both sender and receiver of messages have private information and the sender has a chance to take another action with some probability. We find partially separating and pooling equilibria that satisfy equilibrium refinements such as the intuitive criterion and support collusive outcomes.
Subjects: 
Price leadership
Bertrand–Stackelberg games
Signaling
Espionage
Incomplete information
Tacit collusion
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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