Voracity, growth, and welfare

This paper explores some implications of the comparison between feedback Nash and Stackelberg equilibria for growth and welfare in a 'voracity' model. We show that, as compared to the Nash equilibrium, the Stackelberg equilibrium involves a lower growth rate, while it leaves both the leaders and the followers better off, i.e., the Stackelberg equilibrium is Pareto superior to the Nash equilibrium.

► This paper compares Nash and Stackelberg equilibria in a voracity model. ► The growth rate is higher under Nash equilibrium than under Stackelberg equilibrium. ► The Stackelberg equilibrium is Pareto superior to the Nash equilibrium.