Finding Optimal Strategies in a Multi-Period Multi-Leader-Follower Stackelberg Game Using an Evolutionary Algorithm

Stackelberg games are a classic example of bilevel optimization problems, which are often encountered in game theory and economics. These are complex problems with a hierarchical structure, where one optimization task is nested within the other. Despite a number of studies on handling bilevel optimization problems, these problems still remain a challenging territory, and existing methodologies are able to handle only simple problems with few variables under assumptions of continuity and differentiability. In this paper, we consider a special case of a multi-period multi-leader-follower Stackelberg competition model with non-linear cost and demand functions and discrete production variables. The model has potential applications, for instance in aircraft manufacturing industry, which is an oligopoly where a few giant firms enjoy a tremendous commitment power over the other smaller players. We solve cases with different number of leaders and followers, and show how the entrance or exit of a player affects the profits of the other players. In the presence of various model complexities, we use a computationally intensive nested evolutionary strategy to find an optimal solution for the model. The strategy is evaluated on a test-suite of bilevel problems, and it has been shown that the method is successful in handling difficult bilevel problems.Comment: To be published in Computers and Operations Researc

Multi-criteria Evolution of Neural Network Topologies: Balancing Experience and Performance in Autonomous Systems

Majority of Artificial Neural Network (ANN) implementations in autonomous systems use a fixed/user-prescribed network topology, leading to sub-optimal performance and low portability. The existing neuro-evolution of augmenting topology or NEAT paradigm offers a powerful alternative by allowing the network topology and the connection weights to be simultaneously optimized through an evolutionary process. However, most NEAT implementations allow the consideration of only a single objective. There also persists the question of how to tractably introduce topological diversification that mitigates overfitting to training scenarios. To address these gaps, this paper develops a multi-objective neuro-evolution algorithm. While adopting the basic elements of NEAT, important modifications are made to the selection, speciation, and mutation processes. With the backdrop of small-robot path-planning applications, an experience-gain criterion is derived to encapsulate the amount of diverse local environment encountered by the system. This criterion facilitates the evolution of genes that support exploration, thereby seeking to generalize from a smaller set of mission scenarios than possible with performance maximization alone. The effectiveness of the single-objective (optimizing performance) and the multi-objective (optimizing performance and experience-gain) neuro-evolution approaches are evaluated on two different small-robot cases, with ANNs obtained by the multi-objective optimization observed to provide superior performance in unseen scenarios