When Nash Meets Stackelberg

Fuente: arXiv
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Autores principales: Carvalho, Margarida, Dragotto, Gabriele, Feijoo, Felipe, Lodi, Andrea, Sankaranarayanan, Sriram
Formato: Preprint
Publicado: 2019
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author Carvalho, Margarida
Dragotto, Gabriele
Feijoo, Felipe
Lodi, Andrea
Sankaranarayanan, Sriram
author_facet Carvalho, Margarida
Dragotto, Gabriele
Feijoo, Felipe
Lodi, Andrea
Sankaranarayanan, Sriram
contents This article introduces a class of $Nash$ games among $Stackelberg$ players ($NASPs$), namely, a class of simultaneous non-cooperative games where the players solve sequential Stackelberg games. Specifically, each player solves a Stackelberg game where a leader optimizes a (parametrized) linear objective function subject to linear constraints while its followers solve convex quadratic problems subject to the standard optimistic assumption. Although we prove that deciding if a $NASP$ instance admits a Nash equilibrium is generally a $Σ^2_p$-hard decision problem, we devise two exact and computationally-efficient algorithms to compute and select Nash equilibria or certify that no equilibrium exists. We apply $NASPs$ to model the hierarchical interactions of international energy markets where climate-change aware regulators oversee the operations of profit-driven energy producers. By combining real-world data with our models, we find that Nash equilibria provide informative, and often counterintuitive, managerial insights for market regulators.
format Preprint
id arxiv_https___arxiv_org_abs_1910_06452
institution arXiv
publishDate 2019
record_format arxiv
spellingShingle When Nash Meets Stackelberg
Carvalho, Margarida
Dragotto, Gabriele
Feijoo, Felipe
Lodi, Andrea
Sankaranarayanan, Sriram
Computer Science and Game Theory
Optimization and Control
This article introduces a class of $Nash$ games among $Stackelberg$ players ($NASPs$), namely, a class of simultaneous non-cooperative games where the players solve sequential Stackelberg games. Specifically, each player solves a Stackelberg game where a leader optimizes a (parametrized) linear objective function subject to linear constraints while its followers solve convex quadratic problems subject to the standard optimistic assumption. Although we prove that deciding if a $NASP$ instance admits a Nash equilibrium is generally a $Σ^2_p$-hard decision problem, we devise two exact and computationally-efficient algorithms to compute and select Nash equilibria or certify that no equilibrium exists. We apply $NASPs$ to model the hierarchical interactions of international energy markets where climate-change aware regulators oversee the operations of profit-driven energy producers. By combining real-world data with our models, we find that Nash equilibria provide informative, and often counterintuitive, managerial insights for market regulators.
title When Nash Meets Stackelberg
topic Computer Science and Game Theory
Optimization and Control
url https://arxiv.org/abs/1910.06452