Stackelberg competition

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

Channel Integration Choices and Pricing Strategies for Competing Dual-Channel Retailers

Abstract: The “buy online and pick up in store” (BOPS) mode is gaining tremendous popularity among retailers since it is convenient for consumers and brings additional store sales to retailers. However, operating the BOPS channel requires additional investment, which is a challenge for retailers. This article considers the pricing strategies of competing dual-channel retailers, focuses on whether and when they should adopt the BOPS strategy, and explores the impacts of market factors on the equilibrium outcomes. Since retailers’ decisions are usually made sequentially in reality, we use the Stackelberg game model to analyze retailers’ optimal strategies. First, we show that the follower's price is not always lower than the leader's price. Specifically, when the unit additional profit from cross-selling of the follower is low enough, the follower will set a higher price than the leader. Second, we find that retailers prefer the BOPS strategy when the fixed costs for offering BOPS channels are low enough, or when the difference between the additional profits from cross-selling of two retailers is sufficiently large. Third, we present an interesting insight: an increase in product return probability or retailer cost of handling a returned product can be beneficial to retailers.

An Incentive Framework for Mobile Data Offloading Market Under Price Competition

Abstract: Mobile data offloading can help the mobile network operator (MNO) cope with the explosive growth of cellular traffic, by delivering mobile traffic through third-party access points. However, the access point owners (APOs) would need proper incentives to participate in data offloading. In this paper, we consider a data offloading market that includes both price-taking and price-setting APOs. We formulate the interactions among the MNO and these two types of APOs as a three-stage Stackelberg game, and study the MNO’s profit maximization problem. Due to a non-convex strategy space, it is in general a non-convex game. Nevertheless, we transform the strategy space into a convex set and prove that a unique subgame perfect equilibrium exists. We further propose iterative algorithms for the MNO and price-setting APOs to obtain the equilibrium. Employing the proposed algorithms, the APOs do not need to obtain full information about the MNO and other APOs. Through numerical studies, we show that the MNO’s profit can increase up to three times comparing with the no-offloading case. Furthermore, our proposed incentive mechanism outperforms an existing algorithm by 18 percent in terms of the MNO’s profit. Results further show that price competition among price-setting APOs drives the equilibrium market prices down.

Sufficient conditions for Stackelberg and Nash strategies with memory

Abstract: Sufficiency conditions for Stackelberg strategies for a class of deterministic differential games are derived when the players have recall of the previous trajectory. Sufficient conditions for Nash strategies when the players have recall of the trajectory are also derived. The state equation is linear, and the cost functional is quadratic. The admissible strategies are restricted to be affine in the information available.

Optimal Pricing Effect on Equilibrium Behaviors of Delay-Sensitive Users in Cognitive Radio Networks

Abstract: This paper studies price-based spectrum access control in cognitive radio networks, which characterizes network operators' service provisions to delay-sensitive secondary users (SUs) via pricing strategies Based on the two paradigms of shared-use and exclusive-use dynamic spectrum access (DSA), we examine three network scenarios corresponding to three types of secondary markets In the first monopoly market with one operator using opportunistic shared-use DSA, we study the operator's pricing effect on the equilibrium behaviors of self-optimizing SUs in a queueing system We provide a queueing delay analysis with the general distributions of the SU service time and PU traffic using the renewal theory In terms of SUs, we show that there exists a unique Nash equilibrium in a non-cooperative game where SUs are players employing individual optimal strategies We also provide a sufficient condition and iteraIntive algorithms for equilibrium convergence In terms of operators, two pricing mechanisms are proposed with different goals: revenue maximization and social welfare maximization In the second monopoly market, an operator exploiting exclusive-use DSA has many channels that will be allocated separately to each entering SU We also analyze the pricing effect on the equilibrium behaviors of the SUs and the revenue-optimal and socially-optimal pricing strategies of the operator in this market In the third duopoly market, we study a price competition between two operators employing shared-use and exclusive-use DSA, respectively, as a two-stage Stackelberg game Using a backward induction method, we show that there exists a unique equilibrium for this game and investigate the equilibrium convergence

A Differential Game Related to Terrorism: Nash and Stackelberg Strategies

Abstract: The question of how best to prosecute the ‘war on terror’ leads to strategic interaction in an intertemporal setting. We consider a nonzero sum differential game between a government and a terrorist organisation. Due to the state-separability of the game we are able to determine Nash and Stackelberg solutions in analytic form. Their comparison as well as the sensitivity analysis deliver interesting insight into the design of efficient measures to combat terror.