J. Kerstein

Is Simple Rounding of Quantity Estimates Suboptimal for the First-Mover in a Duopoly Game?

The classic Stackelberg model (CSM) generally yields fractional units given its continuous divisibility assumption. We consider whether the first-mover in a duopoly game is hurt by rounding budgetary estimates of quantity as calculated from the CSM. We derive our benchmark for not rounding by considering a dynamic “gam...