No abstract

This paper considers Stackelberg competition in a general equilibrium framework with a productive sector. The working of market power and the configurations of strategic interactions are complexified by the presence of a leader. Two market price mechanisms are studied: one is associated with the Stackelberg-Walras equilibrium and the other is linked to the Stackelberg-Cournot equilibrium. Throughout the example of a two commodity economy, several results are obtained about equilibria mergings and about welfare comparisons.

Stackelberg-Nash equilibrium, Reaction functions, Market demand functions, Strategic complementarities, D43, L13, L20,