Modelling network interactions on competitive markets

We suggest a game-theoretical model of a multi-agent network, whose purpose is promotion of a homogeneous product (or a service) on a competitive market. We study efficiency of networks employing Cournot and Stackelberg equilibria for the basic applied model of “franchisor-franchisee-market” and that of “producer-mediator-market” under linear costs and inverse demands (which is typical for models of oligopoly), and obtain close-form solutions. The novel feature of the model is the presence of a principal who is responsible for network interactions management and network efficiency improvement.