Title

Solving a Location Problem of a Stackelberg Firm Competing with Cournot-Nash Firms

Document Type

Article

Publication Date

3-2014

Keywords

location analysis, Stackelberg-Cournot-Nash equilibrium, game theory, variational inequality, simulated annealing

Digital Object Identifier (DOI)

https://doi.org/10.1007/s11067-013-9217-3

Abstract

We study a discrete facility location problem on a network, where the locating firm acts as the leader and other competitors as the followers in a Stackelberg-Cournot-Nash game. To maximize expected profits the locating firm must solve a mixed-integer problem with equilibrium constraints. Finding an optimal solution is hard for large problems, and full-enumeration approaches have been proposed in the literature for similar problem instances. We present a heuristic solution procedure based on simulated annealing. Computational results are reported.

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Citation / Publisher Attribution

Networks and Spatial Economics, v. 14, issue 1, p. 117-132