Which is true? Consider the following Stackelberg model of competition, where firm 1 plays first and firm 2 plays second. They both have marginal cost = 0 and no fixed costs. The inverse demand function is P=5-Q, where Q=q1+q2.
In this case, the leader (firm 1) has a disadvantage, as they get lower profits than the follower (firm 2).
The total quantity produced in this situation is lower than the total quantity that would be produced if they chose their quantities simultaneously (under Cournot competition).
In the Subgame Perfect Nash Equilibrium of this game, firm 1 produces q1=2.5 and firm 2 q2=1.25.
In the Subgame Perfect Nash Equilibrium of this game, firm 1 produces q1=5/3 and firm 2 q2=5/3.