Solving a Huff-like Stackelberg location problem on networks

Boglárka G.-Tóth () and Kristóf Kovács ()
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Boglárka G.-Tóth: Budapest University of Technology and Economics
Kristóf Kovács: Budapest University of Technology and Economics

Journal of Global Optimization, 2016, vol. 64, issue 2, No 4, 233-247

Abstract: Abstract This work deals with a Huff-like Stackelberg problem where the leader wants to locate a facility so that its profit is maximal after the competitor (the follower) has built its facility. We assume that the follower makes a rational decision, maximizing its own profit. The inelastic demand is aggregated into the vertices of a graph, and facilities can be located along the edges. For this computationally hard problem we give a Branch and Bound algorithm using interval analysis and DC bounds. Our computational experience shows that the problem can be solved on medium sized networks in reasonable time.

Keywords: Stackelberg problem; Bilevel optimization; Branch and Bound; Interval analysis; DC decomposition (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/s10898-015-0368-2

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