An \(N\)-person Stackelberg leader-leader model (Q1181046)

This reviewer strongly disagrees with the opening sentence of the paper: ``The dynamic analysis of (the) duopoly model formulated by Stackelberg has almost been outside the scope of concern of economists.'' On the contrary, a widespread use of the Stackelberg ``solution concept'', and, more generally, hierarchical games has been seen in the last 10-15 years, mainly in macroeconomic applications of differential games [\textit{M. L. Petit}, ``Control theory and dynamic games in economic policy analysis'' (1990; Zbl 0726.90002); \textit{T. Basar} (ed.), ``Dynamic games and applications in economics'', Lect. Notes Econ. Math. Syst. 265 (1986; Zbl 0579.00023) and \textit{R. P. Hämäläinen} and \textit{H. K. Ehtamo} (ed.), ``Dynamic games in economic analysis'' (Berlin 1991)]. The paper at hand deals with a dynamic Stackelberg output game where both players wish to be the leader. Conditions for local and global stability of the resulting Nash equilibrium are derived under the assumption that in each firm estimates a best response of its rival on the basis of his quantity supplied in the preceding period.