‘Own’ price influences in a Stackelberg leadership with demand uncertainty

Resumen

We consider a Stackelberg duopoly model with demand uncertainty only for the first mover. We study the advantages of leadership and flexibility with the variation of the demand uncertainty and also with the variation of the ‘own’ price effect. We compute, in terms of the demand uncertainty and of the ‘own’ price effect parameter, the probability of the second firm to have higher profit than the leading firm. We prove that, even in presence of low uncertainty, the expected value of the profit of the second firm increases to higher values than the ones of the leading firm with the increase of the ‘own’ price effect.