Quantum Stackelberg duopoly with incomplete information

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 Finn B's unit cost is eradicating the first-mover advantage. (c) 2005 Elsevier B.V. All rights reserved.