The Limits of Limited Commitment

37 Pages Posted: 13 May 2022 Last revised: 19 Feb 2025

See all articles by Jacopo Bizzotto

Jacopo Bizzotto

Oslo Business School - OsloMet

Toomas Hinnosaar

University of Nottingham - School of Economics

Adrien Vigier

University of Oxford - Department of Economics

Date Written: February 19, 2025

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 elicit the commitment structures leading to consumer- and producer-optimal outcomes.

Keywords: commitment, Stackelberg, Cournot, information design

JEL Classification: C72, D43, D82

Suggested Citation

Bizzotto, Jacopo and Hinnosaar, Toomas and Vigier, Adrien, The Limits of Limited Commitment (February 19, 2025). Available at SSRN: https://ssrn.com/abstract=4106613 or http://dx.doi.org/10.2139/ssrn.4106613

Jacopo Bizzotto

Oslo Business School - OsloMet ( email )

Pilestredet 35
Oslo, 0166
Norway

Toomas Hinnosaar

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Adrien Vigier (Contact Author)

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
70
Abstract Views
380
Rank
703,722
PlumX Metrics