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STACKELBERG GAMES ON A NETWORK WITH COURNOT‐NASH OLIGOPOLISTIC COMPETITORS
Author(s) -
Miller Tanfield C.,
Tobin Roger L.,
Friesz Terry L.
Publication year - 1991
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1991.tb00159.x
Subject(s) - stackelberg competition , cournot competition , oligopoly , sensitivity (control systems) , mathematical optimization , nash equilibrium , mathematical economics , variational inequality , competitor analysis , economics , computer science , mathematics , management , electronic engineering , engineering
. We formulate the spatial Stackelberg‐Nash‐Cournot competitive network equilibrium problem as a variational inequality constrained mathematical program. Our model differs from previous models of Stackelberg oligopolistic competition in that it employs explicit shipping decision variables and a general network topology. That is, the production and distribution decisions of the Stackelberg firm are determined simultaneously over a discrete network. We explore the existence of solutions to the proposed model, and we also numerically test a sensitivity analysis based algorithm. In particular, we illustrate how sensitivity analysis results can be used to generate the Cournot reaction necessary to solve the Stackelberg problem.