Modeling and Solving the Benchmark Case in a Diferentiated Stackelberg Duopoly

A particular multilevel optimization problem, generated by a concrete economic problem related to technology transfer area, is approached in the present paper. We study the case when two firms compete on the market in a diferentiated Stackelberg model and there is no technology transfer between the innovator firm (the leader firm) and the follower firm. A mathematical model is attached to this particular economic problem and an optimal solution is found. The model consists in a multilevel parametric programming problem, in which both the upper and the lower level functions are to be maximized under some given conditions.