mathematics
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LANS

LANS Publications

"Solving Multi-Leader-Follower Games"

S. Leyffer and T. Munson

Preprint ANL/MCS-P1243-0405

Preprint Version: [pdf]

Multi-leader-follower games arise when modeling competition between two or more dominant firms and lead in a natural way to equilibrium problems with equilibrium constraints (EPECs). We examine a variety of nonlinear optimization and nonlinear complementarity formulations of EPECs. We distinguish two broad cases: problems where the leaders can cost-differentiate and problems with price-consistent followers. We demonstrate the practical viability of our approach by solving a range of medium-sized test problems.