Leader and Follower: A Differential Game Model
We consider a differential game between two players, where one player has the first mover advantage. We compare the equilibrium strategy profile of this model with the one generated by a conventional symmetric model. It is shown that the existence of a first mover results in more conservationist exploitation in the aggregate. We also consider the implication of departures from the equilibrium. We show that if the leader (the first mover) can commit to decrease its effort over a finite interval of time, then the follower (the second mover) may respond by increasing, or decreasing, its effort, depending on the length of the commitment period.
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