A reducibility method for the weak linear bilevel programming problems and a case study in principal-agent

Yue Zheng, Guangquan Zhang, Zhen Zhang, Jie Lu

Abstract: Highlights • A weak linear bilevel programming (WLBP) problem has been considered. • WLBP is transformed into a jointly constrained bilinear programming problem. • WLBP problem is solved via a single-level disjoint bilinear programming problem. • WLBP problem is applied to principal-agent under the pessimistic point. Abstract A weak linear bilevel programming (WLBP) problem often models problems involving hierarchy structure in expert and intelligent systems under the pessimistic point. In the paper, we deal with such a problem. Using the duality theory of linear programming, the WLBP problem is first equivalently transformed into a jointly constrained bilinear programming problem. Then, we show that the resolution of the jointly constrained bilinear programming problem is equivalent to the resolution of a disjoint bilinear programming problem under appropriate assumptions. This may give a possibility to solve the WLBP problem via a single-level disjoint bilinear programming problem. Furthermore, some examples illustrate the solution process and feasibility of the proposed method. Finally, the WLBP problem models a principal-agent problem under the pessimistic point that is also compared with a principal-agent problem under the optimistic point.