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Abstract
We study a discrete facility location problem on a network, where the locating firm acts as the leader and other competitors as the followers in a Stackelberg-Cournot-Nash game. To maximize expected profits the locating firm must solve a mixed-integer problem with equilibrium constraints. Finding an optimal solution is hard for large problems, and full-enumeration approaches have been proposed in the literature for similar problem instances. We present a heuristic solution procedure based on simulated annealing. Computational results are reported.
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