A note on Stackelberg games

Abstract

Nash game and Stackelberg one are two basic games in game theory community. It is extremely important to further investigate them. Here we show that the leaders will benefit from the interactions in a game. The organization structure in economics is considered with game theory techniques. By game theory approaches, the Nash games and Stackelberg game (leader-follower games) are compared. In a Stackelberg game, if the leader acts as an average player in a Nash game, his/her payoff function value will be reduced. We therefore conclude that a player in a Nash game will benefit from the interactions if he/she transfers into the leader in the corresponding Stackelberg game and other players act as the followers.