Bilevel optimization and its applications

Bilevel optimization is an important research area of Mathematical Programming. It targets hierarchical optimization problems in which part of the constraints translates the fact that some of the variables constitute an optimal solution to another nested optimization problem. It is closely related to Stackelberg games in Game Theory, and it has several applications in Production Planning, Revenue Management, Economy Game Theory, Security, Transportation Planning, etc. We will give an introduction to Bilevel Optimization and its applications, and we will present two new bilevel problems in Portfolio Optimization and Location Theory with real life applications.