Multi-leader-follower potential games

Abstract

In this paper, we discuss a particular class of Nash games, where the participants of the game (the players) are divided into two groups (leaders and followers) according to their position or influence on the other players. Moreover, we consider the case, when the leaders’ and/or the followers’ game can be described as a potential game. This is a subclass of Nash games that has been introduced by Monderer and Shapley in 1996 and has beneficial properties to reformulate the bilevel Nash game. We develope necessary and sufficient conditions for Nash equilibria and present existence and uniqueness results. Furthermore, we discuss some Examples to illustrate our results. In this paper, we discussed analytical properties for multi-leader follower potential games, that form a subclass of hierarchical Nash games. The application of these theoretical results to various fields of applications are a future research topic. Moreover, they are meant to serve as a starting point for the developement of efficient numerical solution methods for multi-leader-follower games.