An Existence Result for Hierarchical Stackelberg v/s Stackelberg Games

Abstract

In Stackelberg v/s Stackelberg games a collection of leaders compete in a Nash game constrained by the equilibrium conditions of another Nash game amongst the followers. The resulting equilibrium problems are plagued by the nonuniqueness of follower equilibria and nonconvexity of leader problems whereby the problem of providing sufficient conditions for existence of global or even local equilibria remains largely open. Indeed available existence statements are restrictive and model specific. In this paper, we present what is possibly the first general existence result for equilibria for this class of games. Importantly, we impose no single-valuedness assumption on the equilibrium of the follower-level game. Specifically, under the assumption that the objectives of the leaders admit a quasi-potential function, a concept we introduce in this paper, the global and local minimizers of a suitably defined optimization problem are shown to be the global and local equilibria of the game. In effect existence of equilibria can be guaranteed by the solvability of an optimization problem, which holds under mild and verifiable conditions. We motivate quasi- potential games through an application in communication networks.