A Markovian mechanism of proportional resource allocation in the incentive model as a dynamic stochastic inverse Stackelberg game (Q1634389)

Summary: This paper considers resource allocation among producers (agents) in the case where the principal knows nothing about their cost functions while the agents have Markovian awareness about his/her strategies. We use a dynamic setup of the stochastic inverse Stackelberg game as the model. We suggest an algorithm for solving this game based on \(Q\)-learning. The associated Bellman equations contain functions of one variable for the principal and also for the agents. The new results are illustrated by numerical examples.