This article is cited in 1 scientific paper (total in 1 paper)
A cut generation algorithm of finding an optimal solution in a market competition
V. L. Beresnevab, A. A. Melnikovab
a Sobolev Institute of Mathematics, 4 Acad. Koptyug Avenue, 630090 Novosibirsk, Russia
b Novosibirsk State University, 1 Pirogov Street, 630090 Novosibirsk, Russia
We consider a mathematical model of market competition between two parties. The parties sequentially bring their products to the market while aiming to maximize profit. The model is based on the Stackelberg game and formulated as a bilevel integer mathematical program. The problem can be reduced to the competitive facility location problem (CompFLP) with a prescribed choice of suppliers which belongs to a family of bilevel models generalizing the classical facility location problem. For the CompFLP with a prescribed choice of suppliers, we suggest an algorithm of finding a pessimistic optimal solution. The algorithm is an iterative procedure that successively strengthens an estimating problem with additional constraints. The estimating problem provides an upper bound for the objective function of the CompFLP and is resulted from the bilevel model by excluding the lower-level objective function. To strengthen the estimating problem, we suggest a new family of constraints. Numerical experiments with randomly generated instances of the CompFLP with prescribed choice of suppliers demonstrate the effectiveness of the algorithm. Tab. 2, bibliogr. 17.
market competition, Stackelberg game, bilevel programming, estimating problem.
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Journal of Applied and Industrial Mathematics, 2019, 13:2, 194–207
V. L. Beresnev, A. A. Melnikov, “A cut generation algorithm of finding an optimal solution in a market competition”, Diskretn. Anal. Issled. Oper., 26:2 (2019), 5–29; J. Appl. Industr. Math., 13:2 (2019), 194–207
Citation in format AMSBIB
\by V.~L.~Beresnev, A.~A.~Melnikov
\paper A cut generation algorithm of finding an~optimal~solution in a market competition
\jour Diskretn. Anal. Issled. Oper.
\jour J. Appl. Industr. Math.
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A. V. Kononov, A. A. Panin, A. V. Plyasunov, “A bilevel competitive location and pricing model with nonuniform split of demand”, J. Appl. Industr. Math., 13:3 (2019), 500–510
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