Asked by MIRTEMUR SHAKIROV on May 27, 2024
Verified
A Stackelberg leader chooses his actions on the assumption that his rival will adjust to the leader's actions in such a way as to maximize the rival's profits.
Stackelberg Leader
A firm in a duopoly that maximizes its profit by making the first move and setting its output level, anticipating the response of the follower firm.
Maximize Profits
The process of making the most favorable decisions to achieve the highest possible earnings after expenses.
- Acquire knowledge of the Stackelberg leadership model and its impact on market movements.
Verified Answer
MB
Makayla BanksMay 28, 2024
Final Answer :
True
Explanation :
This is the fundamental assumption of the Stackelberg model of game theory. The leader is assumed to be able to anticipate the reaction of the follower and choose their actions accordingly.
Learning Objectives
- Acquire knowledge of the Stackelberg leadership model and its impact on market movements.
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