It is a matter of hierarchy: a Nash equilibrium problem perspective on bilevel programming
Lorenzo Lampariello, Simone Sagratella · RePEc: Research Papers in Economics · 2015
Inspired by the optimal value approach, we propose a new reformulation of the optimistic Bilevel programming Problem (BP) as a suitable Generalized Nash Equilibrium Problem (GNEP). We provide a complete analysis of the relationship between the original hierarchical BP and the corresponding "more democratic" GNEP. Moreover, we investigate solvability and convexity issues of our reformulation. Finally, relying on the vast literature on solution methods for GNEPs, we devise a new effective algorithmic framework for the solution of signicant classes of BPs.