Stackelberg competition

About: Stackelberg competition is a research topic. Over the lifetime, 6611 publications have been published within this topic receiving 109213 citations.

A Hierarchical Learning Solution for Anti-Jamming Stackelberg Game With Discrete Power Strategies

Abstract: This letter investigates the anti-jamming problem with discrete power strategies, and then a Stackelberg game is formulated to model the competitive interactions between the user and jammer. Specifically, the user acts as the leader, whereas the jammer is the follower. Based on their own utilities, the user and jammer select their power strategies and determine their respective optimal strategies. Also, a hierarchical power control algorithm (HPCA) is proposed to obtain the Stackelberg equilibrium, and the asymptotic convergence is analyzed. In addition, we consider the impact of the imperfect information due to the jammer’s bounded rationality and inaccurate observation of the user’s action. Finally, simulations are conducted to show the effectiveness of the proposed HPCA algorithm, and simulation results demonstrate that the jammer’s bounded rationality and limited observation lead to the increase of the user’s utility.

A game-theoretic approach towards congestion control in communication networks

Abstract: Most of the end-to-end congestion control schemes are "voluntary" in nature and critically depend on end-user cooperation. We show that in the presence of selfish users, all such schemes will inevitably lead to a congestion collapse. Router and switch mechanisms such as service disciplines and buffer management policies determine the sharing of resources during congestion. We show, using a game-theoretic approach, that all currently proposed mechanisms, either encourage the behaviour that leads to congestion or are oblivious to it.We propose a class of service disciplines called the Diminishing Weight Schedulers (DWS) that punish misbehaving users and reward congestion avoiding well behaved users. We also propose a sample service discipline called the Rate Inverse Scheduling (RIS) from the class of DWS schedulers. With DWS schedulers deployed in the network, max-min fair rates constitute a unique Nash and Stackelberg Equilibrium. We show that RIS solves the problems of excessive congestion due to unresponsive flows, aggressive versions of TCP, multiple parallel connections and is also fair to TCP.

One-Way Essential Complements

Abstract: While competition between firms producing substitutes is well understood, less is known about rivalry between complementors. We study the interaction between firms in markets with one-way essential complements. One good is essential to the use of the other but not vice versa, as arises with an operating system and applications. Our interest is in the division of surplus between the two goods and the related incentive for firms to create complements to an essential good. Formally, we study a two-good model where consumers value A alone, but can only enjoy B if they also purchase A. When one firm sells A and another sells B, the firm that sells B earns a majority of the value it creates. However, if the A firm were to buy the B firm, it would optimaly charge zero for B, provided marginal costs are zero and the average value of B is small relative to A. Hence, absent strong antitrust or intellectual property protections, the A firm can leverage its monopoly into B costlessly by producing a competing version of B and giving it away. For example, Microsoft provided Internet Explorer as a free substitute for Netscape; in our model, this maximizes Microsoft's joint monopoly profits. Furthermore, Microsoft has no incentive to raise prices, even if al browser competition exits. This may seem surprising since it runs counter to the traditional gains from price discrimination and versioning. We also show that an essential monopolist has no incentive to degrade rival complementary products, which suggests that a monopoly internet service provider will offer net neutrality. There are other means for the essential A monopolist to capture surplus from B. We consider the incentive to add a surcharge (or subsidy) to the price of B, or to act as a Stackelberg leader. We find a small gain from pricing first, but much greater profits from adding a surcharge to the price of B. The potential for A to capture B's surplus highlights the challenges facing a firm whose product depends on an essential good.