Stackelberg competition

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

Improving a supplier's quantity discount gain from many different buyers

Abstract: We consider the pricing and inventory decisions of a vendor who supplies a single product to multiple heterogeneous buyers. The problem is analyzed as a Stackelberg game in which the vendor acts as the leader by announcing its pricing policy to all the buyers in advance and the buyers act as followers by choosing their order quantity and the sassociated purchasing price independently under the vendors' pricing scheme. We propose in this paper a pricing policy for the vendor that offers price discounts based on the percentage increase from a buyers' order quantity before discount. The proposed policy is defined as a discrete all-unit quantity discount schedule with many break points. We show that: (I) the proposed policy offers a higher price discount to a buyer ordering a larger quantity and hence complies with general fair trade laws; (ii) an explicit solution is obtained for the vendors' optimal decision; and (iii) although suppliers in reality normally offer price discounts based on a buyers' unit increase in order quantity, the proposed policy is superior for the vendor when there are many different buyers. Other benefits of the proposed pricing policy are demonstrated by numerical examples.

Pricing decisions in a dual channels system with different power structures

Abstract: This paper investigates the effect of product substitutability and relative channel power on pricing decisions under different power structure of a dual exclusive channel system where each manufacturer distributes its goods through a single exclusive retailer but two goods are substitute. A linear demand based on the utility function of a representative consumer is assumed, and three game scenarios on power structures are examined under symmetric and asymmetric related channel powers. It is shown that no power structure is always the best for the entire supply chain though all members on supply chain have incentive to lead the Stackelberg game. Meanwhile, the vertical Nash game is an equilibrium for the members, however, a Prisoner's dilemma necessarily incurs for the entire supply chain because the Retailer Stackelberg or the manufacturer Stackelberg can gain the better performance than that in vertical Nash for the entire supply chain when the product substitutability is moderate or higher and the asymmetric relative channel power is moderate, while consumers always get the most welfare from the vertical Nash game.

Stackelberg-game analysis of correlated attacks in cyber-physical systems

Abstract: This paper studies a resilient control problem for discrete-time, linear time-invariant systems subject to state and input constraints. State measurements and control laws are transmitted over a communication network and could be corrupted by human adversaries. In particular, we consider a class of human adversaries, namely correlated jammers, who are modeled as rational decision makers and whose strategies are highly correlated to the control system operator. The coupled decision making process is modeled as a two-level receding-horizon dynamic Stackelberg (leader-follower) game. We propose a receding-horizon Stackelberg control law for the operator, and analyze the resulting performance and closed-loop stability of the system under correlated attacks. We observe that, with full information of his follower, the operator is still able to maintain regional stability of the control system.