Abstract

We investigate the quantum version of the Stackelberg duopoly with incomplete information, especially how the quantum entanglement affects the first-mover advantage in the classical form. It is found that while positive entanglement enhances the first-mover advantage beyond the classical limit, the advantage is dramatically suppressed by negative entanglement. Moreover, despite that positive quantum entanglement improves the first-mover's tolerance for the informational incompleteness, the quantum effect does not change the basic fact that Firm A's lack of complete information of Firm B's unit cost is eradicating the first-mover advantage.

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