Solving multi-leader-follower games via parametric optimization

EURO Journal on Computational Optimization, vol. 14, pp. 100139

Abstract

Hierarchical Nash game models such as Multi-Leader-Follower games have recently attracted the interest of research as they are an important modeling tool in various applications to study a strategic decision process of individuals, where the individuals are split into a hierarchy of different groups. In this paper, we address these game models using a parametric optimization approach in order to reduce the number of levels to a single-level game. In particular, we further consider the potential followers game to reduce the complexity of the problem. On the one hand, we study various mathematical structures and properties of such nonlinear hierarchical games. On the other hand, we provide suitable numerical solution approaches for the resulting single-level, but nonconvex, non-smooth or disjunctive optimization problems based on the specific theoretical properties. Finally, we finish the paper with computational results for some numerical experiments that support our approaches.

Authors 2

1. Sonja Steffensen corresponding Aachen

   RWTH Aachen University

   Affiliation as printed

   RWTH Aachen University, Templergraben 55, 52056, Aachen, Germany

2. Addis Belete Zewde

   Dire Dawa University

   Affiliation as printed

   Dire Dawa University, Dire Dawa, Ethiopia