1 Introduction Any undergraduate...

1 Introduction

Any undergraduate course in Intermediate Microeconomics or Industrial Organization consigns a considerable amount of time to discussing the Stackelberg pattern of oligopoly. In this paper I disentangle a simple algebraic model which provides a of recent origin perspective on (1) how we teach the interaction between firms in a Stackelberg model; and (2) in what way the same framework can be continueed to a discussion of access (such as the Dixit-Spence model) into an industry.

Most undergraduate subjects such as Carlton and Perloff (1994) Mansfield (1997) Varian (1996) Schotter (1997) Eaton and Eaton (1995) and Salvatore (1997) among others, instant simple ...