Stackelberg Strategies for Dynamic Games with Energy Players Having Different Time Durations

We consider a system that consists of a major electrical power producer player (Public Power Corporation — PPC) playing in infinite time horizon, and minor players (power producers and consumers) remaining in the system for finite time durations, which time durations are overlapping. We study how they interact among themselves (horizontal interaction), and with the major player respectively (vertical interaction), via their decisions/strategies. We study a deterministic LQ version of the problem in discrete time. In our previous work we employed the Nash equilibrium and we studied the behavior of the system. In this paper we use the Stackelberg equilibrium with the long-term players in the role of the Leader.