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The Existence of Equilibria in the Leader-Follower Hub Location and Pricing Problem

In: Operations Research Proceedings 2015

Author

Listed:
  • Dimitrije D. Čvokić

    (University of Banja Luka)

  • Yury A. Kochetov

    (Sobolev Institute of Mathematics
    Novosibirsk State University)

  • Aleksandr V. Plyasunov

    (Sobolev Institute of Mathematics
    Novosibirsk State University)

Abstract

We propose a model where two competitors, a Leader and a Follower, are sequentially creating their hub and spoke networks and setting prices. The existence of the unique Stackelberg and Nash pricing equilibria is shown. On the basis of these results we give the conclusion about existence of the profit maximising solution for the Leader.

Suggested Citation

  • Dimitrije D. Čvokić & Yury A. Kochetov & Aleksandr V. Plyasunov, 2017. "The Existence of Equilibria in the Leader-Follower Hub Location and Pricing Problem," Operations Research Proceedings, in: Karl Franz Dörner & Ivana Ljubic & Georg Pflug & Gernot Tragler (ed.), Operations Research Proceedings 2015, pages 539-544, Springer.
  • Handle: RePEc:spr:oprchp:978-3-319-42902-1_73
    DOI: 10.1007/978-3-319-42902-1_73
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