The Limits of Limited Commitment
Abstract
We study limited strategic leadership. A collection of subsets covering the leader’s action space determines her commitment opportunities. We characterize the outcomes resulting from all possible commitment structures of this kind. If the commitment structure is an interval partition, then the leader’s payoff is bounded by her Stackelberg and Cournot payoffs. Under general commitment structures, the leader may obtain a payoff that is less than her lowest Cournot payoff. We apply our results to a textbook duopoly model and characterize the commitment structures leading to consumer- and producer-optimal outcomes. (JEL C72, D43)
Fields of Study & Subjects
Game Theory and Applications
Merger and Competition Analysis
Experimental Behavioral Economics Studies
Publication details
- Journal / source
- American Economic Journal Microeconomics
- Volume
- 18
- Issue
- 1
- Pages
- 254–280
- Publication date
- 28 January 2026
- Language
- EN