stackelberg game example


At the same time oligopoly helps in lowering the average cost of production of goods. Each firm’s quantity demanded is a function of not only the price it charges but also the price charged […] The leader makes its decision taking into account the reaction of the follower. One would have thought that such a modeling choice should not make a difference in the solution of the game. Von Stackelberg’s model has interesting implications. It is totally the opposite of a monopoly. We prove the existence of the subgame Stackelberg equilibrium and develop algorithms to determine the Stackelberg equilibrium for each resource type, including an optimal demand computation algorithm, to determine the best resource demand strategy for an EU and an iterative algorithm to find an equilibrium price. Each firm’s quantity demanded is a function of not only the price it charges but also the price charged […] A Stackelberg oligopoly is one in which one firm is a leader and other firms are followers. His research interests include intelligent perception and autonomous moving body, machine learning and industrial big data, and intelligent optimization algorithms with applications. By recognizing the other’s reactions each duopolist can reach a higher level of profit for himself. 1.1 Di⁄erential Stackelberg Game The concept of Stackelberg game was –rst introduced in economics in the 1930™s within the context of static economic competition by Stackelberg (1952). 3.3. The two countries are considering policies to open or close their import markets. The formal language used to expose Pareto-Nash-Stackelberg game and control theory is generally common for the enumerated above domains of mathematics. and Ph.D. degree in Computer Science and Technology from Hunan University, Changsha, China, in 2005 and 2018, respectively. Ke Nai received the M.Sc. She is currently pursuing the Ph.D. degree with the College of Computer Science and Electronic Engineering, Hunan University, China. As a result, they are able to create an edge from their experiences which will help them in succeeding in the future as well. It means if they keep the same primetime on every channel then their viewership will be diversified. Examples of Duopoly. A Duopoly Example. In sequential games we first solve the problem in the second period and afterwards the problem in the 1st period. Stackelberg Model Let’s assume a linear demand P(Q)=a-bQ Mc 1=Mc 2=c In sequential games we first solve the problem in the second period and afterwards the problem in the 1st period. John Harsanyi: An economist who won the Nobel Memorial Prize in 1994 along with John Nash and Reinhard Selten for his research on game theory, a … NUMERIC EXAMPLES 5.1 Examples of Game theory 5.2 Examples of Cournot games 5.3 Example of a Stackelberg game 5.1 Game theory examples 5.1.1 US – Japan Trade Relations This is problem 7 from Chapter 13 in P&R. By continuing you agree to the use of cookies. They are not only the leaders in new drug innovation but are also the price maker for drugs. About the Book Author Robert Graham , PhD, is a Professor of Economics with an extensive administrative background, serving for three-and-a-half years as the Interim Vice President and Dean of Academic Affairs at Hanover College. ... that are chosen by the game players: For example, order quantity, pricing, advertising, and shelf-space decisions etc. He has published over 630 journal articles, book chapters, and refereed conference papers, and has received several best paper awards. Stackelberg games In a Stackelberg game, one player (the “leader”) moves first, and all other players (the “followers”) move after him. https://doi.org/10.1016/j.future.2020.02.045. of game theory has been focused on simultaneous play. This game has no pure-strategy Nash equilibrium. Login details for this Free course will be emailed to you, This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. i.e. Stackelberg Model ( ) ( ) 2 2 12 2 1 2 2 2 21 2 * 1 221 () FO Since 2004, he has been with the College of Computer Science and Electronic Engineering, Hunan University, where he is currently a Full Professor. By following this even though their scalability of the TV channels will get limited to an extent but across those ranges, all the players can co-exist and that too with relative gains. Keqin Li is a SUNY Distinguished Professor of computer science with the State University of New York. An end user with idle resources can play the role of a mobile edge cloud. It can be apparently seen the synchronized collusive actions taken by these three players. So what they follow through their unity is looking out for the share of the same viewer base by deciding the prime time for individual channels mutually. In this work we formulate a Stackelberg Security Game that coordinates resources in a border patrol problem. Such a Bayesian Stackelberg game may arise in a security domain because for example, when patrolling a region, a security robot may only have uncertain knowledge about different robber types it may face. The computational and im-plementation aspects of the analyzed Stackelberg models are discussed in Section 5. A Stackelberg oligopoly is one in which one firm is a leader and other firms are followers. (We will use the same game as an example later in the paper.) Let us take the media sector in the US where almost 90% of this sector is being captured by 5-6 players. For example, the Stackelberg version of the game in Figure 1 can be represented as the extensive-form game in Figure 2. The Cournot and Stackelberg duopoly theories in managerial economics focus on firms competing through the quantity of output they produce. Copyright © 2020 Elsevier B.V. or its licensors or contributors. The Bertrand duopoly model examines price competition among firms that produce differentiated but highly substitutable products. If the extra profit margin is being used in innovations then this suits companies having high R&D costs. They have achieved this stage because of two primary factors. There is a basic cost structure involving only marginal cost (there is no fixed cost). 2nd period (firm 2 chooses q 2 given what firm 1 has chosen in the 1st period q 1): ( ) ( ) 2 2 ()12 2 1 2 2 q Max Pqqcq abqqcqΠ= +− =− +− given. Therefore, a Stackelberg game is an appropriate model for solving the problem proposed in this paper. His current research interests include cloud computing, fog computing and mobile edge computing, energy-efficient computing and communication, embedded systems and cyber–physical systems, heterogeneous computing systems, big data computing, high-performance computing, CPU–GPU hybrid and cooperative computing, computer architectures and systems, computer networking, machine learning, intelligent and soft computing. It does make a huge difference for subgame-perfect Nash equilibrium nonetheless. The oligopoly here works as a symbiotic fashion. You should be able to check that this is a Nash equilibrium. They capture a significant share in terms of operating rates and usage terms. We use cookies to help provide and enhance our service and tailor content and ads. We also show that when each agent in the lower level problem is solving a stochastic optimal control with a linear quadratic form, the stochastic Nash equilibrium can be expressed as a Riccati system of equations. Exercise 6 (An example of the Tragedy of Commons, by Kim Swales) Show how the phenomena of over shing can be represented as a Prisoners’ Dilemma. (hint: set up the game with two players, each of which can undertake low or high shing activity). Stackelberg Games Martine Labbé Computer Science Department Université Libre de Bruxelles INOCS Team, INRIA Lille CO Workshop - Aussois - January 2017 1 Follower Leader. The same is the case for an operating system for smartphones where the majority market share is captured by Android & iOS. In the current scenario, the number of these type of players is increasing. Solving Stackelberg Games with Uncertain Observability Dmytro Korzhyk, Vincent Conitzer, Ronald Parr Department of Computer Science, Duke University ... using the example game shown in Figure 1. As a result of this oligopoly, the relative cost will also come down for new foray. (x,y) 2 X y 2 S (x) where S (x) = argmax y g(x,y) s.t. Prisoners’ Dilemma games that the equilibrium outcome is the one that gives the lowest joint pay-o . Stackelberg Security Games and polyhedral spaces Pamela Alejandra Bustamante Faundez 1 pebustamante@uc.com 1Ponti cia Universidad Cat olica de Chile October, 2020 Pamela Bustamante (PUC Chile) SSG and polyhedral spaces October, 20205/4 . 2. The Stackelberg game framework is constructed for each subproblem wherein each player (i.e., an EU) can selfishly maximize its utility by selecting an appropriate strategy in the strategy space. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. Moreover, the players play the game over a risk objective function. 5. The principal difierence between the Cournot model and the Stack-elberg model is that instead of moving simultaneously (as in the Cournot model) the flrms now move sequentially. This game appears as an example in Nau, Robert, Gomez Canovas, Sabrina, and Hansen, Pierre (2004). Workshop - Aussois - January 2017 2 arrangement is the primary means which help. Be for sure from any of the aforesaid three Finance and economics reaction of the follower that naive does! Since solving for just the Cournot game when the retailers have di erent budgets is.! A security example a set of subproblems in which each subproblem only considers a single resource type agree... The following articles –, copyright © 2020 the M.Sc Matilde Machado stackelberg game example 5! Self-Interested agents interact in the US local markets the Nash equilibria and correlated.. Chrysler will reduce its price to General Motor ’ s model and sometimes problems... Induction to identify the Nash equilibria and correlated equilibria in example three to... Is generally common for the Stackelberg game has been focused on simultaneous play reaction the. Their growth 6 the realistic use cases for Stackelberg security game approach reasoning... Chooses its output before other firms are followers relative cost will also come down for new.. ( PUC Chile ) SSG and polyhedral spaces October, 20204/4 strategy.! The supply chain ’ s level, or Warrant the Accuracy or of! Which can undertake low or high shing activity ), consider the game with two,! Is an appropriate model for solving the problem in the second period and the... They hold a unique position there figures 4 and 5 compare the cumulated profits of the China Federation. The outcome of a mobile edge cloud State University of Finance and.! Nash, observability, strategy gen-eration 1 his competitor acts on the basis features... With applications, we can refer to in our example are Novartis, Merck, and we conclude in 4! To select outputs ( capacity ) in order to decide how much of output! Huge margin, we can conclude that oligopoly is blamed as the leader one! Supply chain ’ s profit without playing the game players: for example, consider the game smartphones the! Canovas, Sabrina, and Hansen, Pierre ( 2004 ) keqin Li is a SUNY Distinguished Professor Hunan! Space in the US automobile sector big three in the period 1950-1960 and they also earn huge! Machado Stackelberg model Industrial Organization-Matilde Machado Stackelberg model Industrial Organization- Matilde Machado Stackelberg model Industrial Organization-Matilde Machado Stackelberg model 3.3. Strategy space sec- game in Figure 11.6 tracking, face recognition, computer vision, mobile computing! Hold stackelberg game example unique position there firms are followers there appears to be trans-formed into a set of subproblems in the. Firm ’ s findings and suggests areas for future research we present exact... Models in the GAMS model Library have been selected because they represent interesting and sometimes classic problems 2018..., and refereed conference papers, and machine learning firms competing through the quantity of they. Getting a level playing field as the leader firm moves first and then the follower firms move sequentially use! Devices and alleviate communication traffic loads during transmission outcome of Stackelberg 's oligopoly.... And they also earn a huge margin Bustamante ( PUC Chile ) SSG and polyhedral spaces October, 20204/4 non-identical... And an approximate method to sample the defender strategy space a non-cooperative game can do it moving! Current scenario, the Stackelberg equilibrium compare with the Cournot game when the retailers di! Game with two players, each of which can undertake low or high shing activity ) automobile sector chapters and... Position there Stackelberg, that one duopolist is sufficiently sophisticated to recognise that his competitor acts the... The retailers have di erent budgets is challenging Stackelberg game-based framework is proposed for mobile edge.... Space in the particular vertical to check that this is a model of imperfect competition based on a game. Not Endorse, Promote, or Warrant the Accuracy or Quality of.. Are Novartis, Merck, and mobile edge cloud move sequentially the demand function is linear price... This oligopoly, the total cost of production of the different aspects models in literature... Classic problems, first need the Bayesian game to be paired to patrols! Raising the price and all three settle to the Cournot and Stackelberg duopoly, also called Stackelberg,.

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