Two Player Decision Behaviors Changing in Repeated Game

Abstract

This paper studies Stackelberg model in repeated game with the learning attitude of the follower and leader-follower. Leader player (firm-A) and follower player (firm-B) produce the homogeneous good in initial period. Follower does not want to be a follower always, but want to work with equal profit gainer at least. In finite periods play, both firms tent to produce the homogeneous good as per Cournot Game due to having leader-firm’s farsightedness in production of good. Both the Firms collude and produce less than Nash-Cournot equilibrium to maximize its profit in each period.