Discontinuous Stackelberg solutions

Abstract
This paper deals with a class of many-person non-zero-sum differential games in which one player has the role of ‘ leader ’ while the others ‘ follow ’. Necessary conditions are obtained for the existence of open-loop Stackelberg solutions under the assumption that the followers respond to the leader by selecting Nash equilibrium controls. Some simple investment problems are described which give rise to discontinuous optimal controls for both leader and follower(s).

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