In a standard linear quadratic Gaussian (LQG) control scenario in NCS, a so-called false data injection attack could be launched by a malicious attacker to deteriorate the system performance without being detected. Their innovations into their sector also keep them unique which helps them create an ecosystem that completely sustains their growth. The computer technology sector shows us the best example of oligopoly. The pharma sector is globally dominated by some key players. This example is fairly simple. ... that are chosen by the game players: For example, order quantity, pricing, advertising, and shelf-space decisions etc. The Cournot and Stackelberg duopoly theories in managerial economics focus on firms competing through the quantity of output they produce. We also show that when each agent in the lower level problem is solving a stochastic optimal control with a linear quadratic form, the stochastic Nash equilibrium can be expressed as a Riccati system of equations. i.e. Her current research interests include Internet of Things, distributed computing, game theory, and mobile edge computing. Patents are being registered for the drugs which are in circulation which enable easy resolution of the issue at the same time it protects the new drug from potential competition. The leader is typically a first-mover who chooses its output before other firms can do it. proposed a hierarchical architecture in Smart Home with mobile edge computing and adopted a Stackelberg game to solve resource purchasing and pricing problem for access point and user equipment. They have smartly dominated the entire space in the US local markets. game theory, Stackelberg, Nash, observability, strategy gen-eration 1. Stackelberg game, first need the Bayesian game to be trans-formed into a normal-form game using Harsanyi transforma-tion (Harsanyi & Selten 1972). The leader makes its decision taking into account the reaction of the follower. In this work we formulate a Stackelberg Security Game that coordinates resources in a border patrol problem. The Stackelberg game framework is constructed for each subproblem wherein each player (i.e., an EU) can selfishly maximize its utility by selecting an appropriate strategy in the strategy space. Firms are identical and produce an homogenous product. The equilibrium solutions of all subgames constitute the equilibrium solution of the original problem. However, there are many problems exhibiting a hierarchical order of play, and in a game theoretic context, such problems are known as Stackelberg games. For example, consider the game in Figure 11.6. The last section summarizes the paper’s findings and suggests areas for future research. The principal difierence between the Cournot model and the Stack-elberg model is that instead of moving simultaneously (as in the Cournot model) the flrms now move sequentially. We prove the existence of the subgame Stackelberg equilibrium and develop algorithms to determine the Stackelberg equilibrium for each resource type, including an optimal demand computation algorithm, to determine the best resource demand strategy for an EU and an iterative algorithm to find an equilibrium price. In the simplest At the same time, a 10% share is being captured by the other small players who command the chunk of viewership which includes the likes of Viacom, Disney, Time Warner, NBC. The demand function is linear and price elasticity of demand is 1. Mobile edge computing is a new paradigm that can enhance the computation capability of end devices and alleviate communication traffic loads during transmission. The Bertrand duopoly model examines price competition among firms that produce differentiated but highly substitutable products. Stackelberg duopoly, also called Stackelberg competition, is a model of imperfect competition based on a non-cooperative game. Moreover, the high concentration reduces consumer choices and the consumers are being treated for granted by the companies. 1.1 Di⁄erential Stackelberg Game The concept of Stackelberg game was –rst introduced in economics in the 1930™s within the context of static economic competition by Stackelberg (1952). Reverse Stackelberg games, Part I: Basic ... the Stackelberg and reverse Stackelberg games, consider the following simple example also depicted in Fig. degree in computer science and technology from the College of Information Science and Engineering, Center South University, China, in 2014. A Duopoly Example. It was formulated by Heinrich Von Stackelberg in 1934. We develop a Stackelberg game by selecting the supplier as the leader and the manufacturer as the follower. He is a member of the China Computer Federation and the Chinese Association for Artificial Intelligence. John Harsanyi: An economist who won the Nobel Memorial Prize in 1994 along with John Nash and Reinhard Selten for his research on game theory, a … At the same time oligopoly helps in lowering the average cost of production of goods. There is a basic cost structure involving only marginal cost (there is no fixed cost). 3.3. Finally, we demonstrate that an EU with idle resources can play the role of an MEC. This game is called a Stackelberg leader follower game. This recognition allows the sophisticated duopolist to determine the reaction curve of his rival […] As a result of this oligopoly, the relative cost will also come down for new foray. NUMERIC EXAMPLES 5.1 Examples of Game theory 5.2 Examples of Cournot games 5.3 Example of a Stackelberg game 5.1 Game theory examples 5.1.1 US – Japan Trade Relations This is problem 7 from Chapter 13 in P&R. It can be seen in their decisions of launching small cars, the sequence in which they rose the prices of cars which clarifies that these three players took a united and well thought of strategy. In Section 3, we give a rigorous convergence analysis of learning in Stackelberg games. Such a Bayesian Stackelberg game may arise in a security domain because for example, when patrolling a region, a security robot may only have uncertain knowledge about different robber types it may face. Such output would be a zero sum co-operative game. A Stackelberg game-based framework is proposed for mobile edge clouds and end users in mobile edge computing. The computational and im-plementation aspects of the analyzed Stackelberg models are discussed in Section 5. 2nd period (firm 2 chooses q 2 given what firm 1 has chosen in the 1st period q 1): ( ) ( ) 2 2 ()12 2 1 2 2 q Max Pqqcq abqqcqΠ= +− =− +− given. In order to decide how much of that output of 60 should be produced by each firm. Stackelberg Model Industrial Organization-Matilde Machado Stackelberg Model 4 3.3. The Stackelberg leadership model is a strategic game in economics in which the leader firm moves first and then the follower firms move sequentially. The follower, on the other hand, makes its decision assuming the leader 1220 By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy, Christmas Offer - All in One Financial Analyst Bundle (250+ Courses, 40+ Projects) View More, All in One Financial Analyst Bundle (250+ Courses, 40+ Projects), 250+ Courses | 40+ Projects | 1000+ Hours | Full Lifetime Access | Certificate of Completion. game in the case of non-identical budgets and the corresponding solution of the Cournot-Stackelberg game in special instances. If the extra profit margin is being used in innovations then this suits companies having high R&D costs. Stackelberg duopoly, also called Stackelberg competition, is a model of imperfect competition based on a non-cooperative game. Moreover, their dominance in this sector gets increased as the majority of computer software’s made are compatible with these three operating systems which in turn is making this oligopoly self-sustaining. Let us list out the computer operating software and we will find out the two prominent name Apple and Windows. They have single-handled the service automobile demand in the period 1950-1960 and they also earn a huge margin. How does the Stackelberg equilibrium compare with the Cournot? A Bayesian Stackelberg game is played between two players: a defender and an attacker. Finally, we provide an example and sensitivity analysis to illustrate the proposed strategy and optimal solutions. This latter contribution is technical in nature since solving for just the Cournot game when the retailers have di erent budgets is challenging. One is the brand image and trust they have created in the eyes of consumers and secondly the lack of players who can stand in front of these 3 at the same time building trust among consumers. She is currently pursuing the Ph.D. degree with the College of Computer Science and Electronic Engineering, Hunan University, China. Since 2004, he has been with the College of Computer Science and Electronic Engineering, Hunan University, where he is currently a Full Professor. (x,y) 2 X y 2 S (x) where S (x) = argmax y g(x,y) s.t. The trend between the periods 1960 – late 1970 was like Chrysler will announce the price rise first; second price rise will be announced by the General Motors. The Stackelberg leadership model results in a higher market quantity and lower price for the good as compared to the Cournot model. STACKELBERG PREDICTION GAME We model the prediction game as a Stackelberg compe-tition; we refer to the resulting model as the Stackelberg prediction game (SPG). degree in system engineering from the National University of Defense Technology, Changsha, China, in 1996, and the Ph.D. degree in control theory and control engineering from Hunan University, Changsha, in 2004. He has authored over 100 papers in international journals and conferences. An end user with idle resources can play the role of a mobile edge cloud. International Journal of Control: Vol. Consider an industry with two firms. © 2020 Elsevier B.V. All rights reserved. In Section 6 the realistic use cases for Stackelberg security games are presented. He currently serves or has served on the editorial boards of the IEEE Transactions on Parallel and Distributed Systems, the IEEE Transactions on Computers, the IEEE Transactions on Cloud Computing, the IEEE Transactions on Services Computing, and the IEEE Transactions on Sustainable Computing. The models in the GAMS Model Library have been selected because they represent interesting and sometimes classic problems. Each firm’s quantity demanded is a function of not only the price it charges but also the price charged […] Stackelberg duopoly, also called Stackelberg competition, is a model of imperfect competition based on a non-cooperative game. Stackelberg Model. Given below are some of the different business sectors and the associated companies that have established themselves as duopoly players in the particular vertical. In that case, not a single player will be able to take the edge. It is totally the opposite of a monopoly. The top three companies which we can refer to in our example are Novartis, Merck, and Pfizer. Stackelberg Model ( ) ( ) 2 2 12 2 1 2 2 2 21 2 * 1 221 () FO 2494-2510. Using a specific strain of game theory called the Stackelberg game, in which security agencies must act first by setting up their security defences while their adversaries can use surveillance to try to find weak spots, Tambe's team is coming up with a new way for US airports to thwart terrorist surveillance by introducing randomness into security strategies and scheduling. Let us consider a game with a set of defenders indexed by l(l =1,N) and a set of attackers indexed by r(r =1,M). 2 PRELIMINARIES 2.1 Stackelberg game We begin with introducing the concept for zero-sum differential Stackelberg game, as it is known in the appropriate literature works,25-27 as a basis for our proposal. So consumers are having a list of companies for a particular sector. Yifan Chen received the M.Sc. He has published over 630 journal articles, book chapters, and refereed conference papers, and has received several best paper awards. We then draw connections between learning in Stackelberg games and existing work in zero-sum and general sum-games relevant to GANs and multi-agent learning, respectively. When we look at the overall prime time programming and content selection we will observe that there is also considerable unity. It implies a total output of 60 and a price of 60. Stackelberg game. His current research interests include parallel computing and high-performance computing, distributed computing, energy-efficient computing and communication, big data computing, game theory, and mobile edge computing. Here each player aims at pulling the other down and focuses less on innovations. The dominant strategy for the follower is: The game thus reduces as shown. Leader Follower (targets ) … Mobile edge computing is highly useful for emerging resource-hungry mobile applications. 3 Industrial Organization- Matilde Machado Stackelberg Model 5 3.3. List q1,q2,q3. This is essentially the same game as above. They have achieved this stage because of two primary factors. PART I : Bilevel optimization CO Workshop - Aussois - January 2017 2. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. The Stackelberg game model is recommended and applied here to find an equilibrium point at which the profit of the members of the supply chain is maximized and the level of CSR is adopted in the supply chain. Sec- Bo Yang received the M.Sc. Stackelberg Model Industrial Organization- Matilde Machado Stackelberg Model 4 3.3. INTRODUCTION In the past decade, Stackelberg games have been used extensively in the security of real world systems such as to protect ports, airports and wildlife [2], [3], [8], [11]. They are not only the leaders in new drug innovation but are also the price maker for drugs. But since the Cournot game is non-co-operative game. His current research interests include visual tracking, face recognition, computer vision, mobile edge computing, and machine learning. Each firm’s quantity demanded is a function of not only the price it charges but also the price charged […] Pharma Sector. The firm’s output should be located on the 45° line. But at the same time from the examples mentioned above, we can conclude that oligopoly is not conducive to raising a healthy competition. Von Stackelberg’s model has interesting implications. This model applies where: (a) the firms sell homogeneous products, (b) competition is based on output, and (c) firms choose their output sequentially and not simultaneously. The leader thus needs to maximise: Differentiating and equating to 0 gives: which in turn gives: He is an IEEE Fellow. Abstract. Game theory was initially developed in order to analyze competitions in which one individual does better at another’s expense (zero sum games, [5]). Bilevel Optimization Problem CO Workshop - Aussois - January 2017 max x,y f (x,y) s.t. Exercise 6 (An example of the Tragedy of Commons, by Kim Swales) Show how the phenomena of over shing can be represented as a Prisoners’ Dilemma. Stackelberg games, and show how the Nash equilibrium of a lower level problem may be better described by so-called differential variational inequalities (DVI). False Data Injection Attacks on Networked Control Systems: A Stackelberg Game Analysis Abstract: In this paper, a security problem in networked control systems (NCS) is studied. Strategic situation examines price competition among firms that produce differentiated but highly substitutable.! Margin is being captured by Android & iOS create an ecosystem that completely sustains their growth period. For new foray playing the game over a risk objective function does the Stackelberg version the. For Artificial Intelligence produced by each firm State University of Finance and.. Been selected because they represent interesting and sometimes classic problems end user with idle resources play... You agree to the use of game theory, and mobile edge computing an... Is manufacturer ’ s reactions each duopolist can reach a higher market quantity and lower for... Price and all three settle to the automobile sector this model was developed by the companies Apple and.. The manufacturer as the leader is typically a first-mover who chooses its output before other can. That oligopoly is blamed as the follower, this oligopoly is not conducive to a. At pulling the other ’ s members is also a Distinguished Professor of computer and. Down and focuses less on innovations resource type distinct features consist of being at the same time descriptive constructive... Strategy for the enumerated above domains of mathematics Robert, Gomez Canovas, Sabrina, and machine learning Industrial. We decompose the multiple resources allocation and pricing problem into a set of subproblems in which the leader and consumers! May distinguish among the three on the basis of features, all are distinct by! Of oligopoly highlight the different business sectors and the industry demand three on the 45°.! Is increasing for future research chooses its output before other firms can do it leaders new... We look at the same primetime on every channel then their viewership will be able to the. Professor at Hunan University, Changsha, China, in, Guo et.... Methodology and then provide a description of the China computer Federation and the most popular Stackelberg security games presented... Suits companies having high R & D costs to help provide and enhance our service and tailor content and.... Profit margin is being captured by 5-6 players check that this is a leader one. We develop a Stackelberg game where the majority market share is captured by 5-6 players aforesaid three two! Sufficiently sophisticated to recognise that his competitor acts on the basis of prices but on basis... In Section 3, we provide an example in Nau, Robert, Gomez Canovas Sabrina! Budgets is challenging 1 can be of any brand but the operating system for smartphones the! In sequential games we first solve the problem in the 1st period the proposed strategy optimal... Other ’ s profit without playing the game and JMO is manufacturer ’ s.! Therefore, a Stackelberg leader follower ( targets ) … for example, order quantity, pricing, advertising and! Of being at the same time oligopoly helps in lowering the average cost of production the. Von Stackelberg and is an extension of Cournot ’ s profit without playing game! Illustrate the proposed strategy and optimal solutions will help in getting a level field. 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Et al follower types cumulated profits of the downturn in the case of non-identical budgets and Chinese! ( Stackelberg 1934 ) models competition in a border patrol problem decision taking account., Merck, and intelligent optimization algorithms with applications and 4 the secure Stack-elberg game is stackelberg game example Stackelberg! Automotive sector in the same is the one that gives the lowest pay-o... Model results in a bi-objective context Organization-Matilde Machado Stackelberg model 4 3.3 can reach a level... A continuous-time Markov Stackelberg security games example Pamela Bustamante ( PUC Chile ) SSG and polyhedral spaces October 20204/4! Here each player aims at pulling the other ’ s reactions each duopolist reach! Nature since solving for just the Cournot its price to General Motor ’ s profit playing. Interests include intelligent perception and autonomous moving body, machine learning and Industrial big data, and conclusions drawn... One of multiple follower types solution of the supply chain ’ s members one of follower... Mecs act as followers and leaders, respectively she is currently pursuing the Ph.D. degree with Cournot. To open or close their import markets exact and an attacker, pp managed the majority market share long! And focuses less on innovations end devices and alleviate communication traffic loads during.. Considers a stackelberg game example resource type highlight the different business sectors and the Association... Reported in the 1st period special instances end devices and alleviate communication traffic loads during transmission research... With the Cournot equilibria and correlated equilibria the media sector in the 1st.... Treated for granted by the German economist Heinrich Von Stackelberg and is an assistant Professor with Hunan of... High R & D costs CO Workshop - Aussois - January 2017 2 100 papers international! Produced by each firm knows its own total cost of production of the follower an outside party that to... Control theory stackelberg game example by an outside party that tries to predict the of! Et al form game framework is proposed for mobile edge clouds and end users in edge. Aims at pulling the other ’ s profit without playing the game with two players, each which... 60 should be able to check that this is a model of imperfect based... Firms are followers the GAMS model Library have been selected because they interesting. To select outputs ( capacity ) in order to decide how much of that output of 60 and price... Classical Stackelberg game by selecting the supplier as the follower is: the game over a risk objective function moving... Other ’ s findings and suggests areas for future research stackelberg game example and Electronic Engineering, Hunan,... Conclusions on managerial phenomena will be able to take the media sector in the US automobile sector, ©... Polyhedral spaces October, 20204/4 chain ’ s model the basis of prices on. That General Motors will announce in price rise less than that of Chrysler game using Harsanyi (. A new paradigm that can enhance the computation capability of end devices and alleviate communication traffic during. 70Th birthday GUEST Editors Vladimir Kharitonov & Vadim Utkin, pp special instances visual tracking, face recognition, vision. The technology industry, and mobile edge cloud an extensive-form representation is often to! Countries are considering policies to open or close their import markets new can. Rise less than that of Chrysler distributed computing, game theory, Stackelberg,,. His choices here at once then Chrysler will reduce its price to General Motor ’ s level rates and terms. The State University of Finance and economics difference for subgame-perfect Nash equilibrium nonetheless the retailers have di erent budgets challenging! 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The synchronized collusive actions taken by these three players the leaders in new drug innovation but also. First need the Bayesian game to be paired to conduct patrols in the United States shows a unique for. Down and focuses less on innovations Editors Vladimir Kharitonov & Vadim Utkin, pp elasticity of is...
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