Working Paper: CEPR ID: DP17307
Authors: Jacopo Bizzotto; Toomas Hinnosaar; Adrien Vigier
Abstract: We study limited strategic leadership. A collection of subsets covering the leader's action space determine her commitment opportunities. We characterize the outcomes resulting from all possible commitment structures of this kind. If the commitment structure is an interval partition, then the leader's payoff is bounded by her Stackelberg and Cournot payoffs. However, under more general commitment structures the leader may obtain a payoff that is less than her minimum Cournot payoff. We apply our results to study information design problems in leader-follower games where a mediator communicates information about the leader's action to the follower.
Keywords: commitment; Stackelberg; Cournot; design
JEL Codes: C72; D43; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CST (C87) | Leader's Payoffs (J33) |
| CST (interval partition) (C46) | Leader's Payoffs (J33) |
| CST (C87) | Strategic Outcomes (L21) |
| CST (C87) | Bounds for Payoffs (C79) |
| Nature of Commitment (L14) | Leader's Strategic Opportunities (L21) |