10. Extensive Games with infinitely Many Strategies: Stackelberg Duopoly (Game Theory Playlist 6)

In this episode we introduce the famous Stackelberg duopoly competition game. We apply backward induction to solve for the subgame perfect nash equilibrium of this game.
It's crucial to watch lecture videos in the proper order to ensure effective learning. This is because the concepts in each video build upon those introduced in previous videos. To help you with this, I recommend visiting my website, www.selcukozyurt.com, for a recommended course outline.

[@mrigankchugh2096]

Great work! Your explanation is pretty lucid and straightforward.

[@benardkiplimo3508]

Well done prof! Thank you for taking the time to explain the concepts clearly. Couldn't have been much clearer!

[@vaishnavishetye4383]

Superb explanation sir !! Never knew this model was so simple to understand. Thank you so much 💯

[@karthikkrishnamurthy5709]

Love your explanation and delivery. Keep up the good work.

[@eltuneyvazzade8845]

Perfect explanation!

[@user-ui2mp2oj8x]

you are awesome)

[@kub1031]

Iyi ki varsiniz hocam

[@e-k4110]

hocam tesekkurler

[@tanvirkaisar7245]

great video! one question though, what model would it be if there was a time lag between moves?

[@selcukozyurt]

If time lag doesn’t have any impact on payoffs, then it is the same as the Stackelberg model because two games would be “outcome equivalent.”

[@hotbuzz5325]

I think in SPNE, q1 should also be written as q1(q2) because you plugged in value of q2(q1) while optimizing for q1. Strategy function for q1 is also a function of profit maximizing q2.

[@selcukozyurt]

Great question and a sophisticated confusion: No, you can’t write q1(q2) because firm 1 doesn’t know/observe q2, and hence can’t condition its strategy to an unobserved parameter (very much like simultaneous game). A general rule in game theory is that a player can’t condition her strategies on unobserved parameters, she can condition only on observables. Not sure if it is clearer now, but if you resolve this issue of yours and fully understand it, you move to an expert level in game theory. Best of luck!

[@Nekannt]

In German we would say: "Ehrenmann!"

[@Kolt-gj1il]

geyik